Modeling housing appreciation dynamics in disadvantaged neighborhoods

There is long-standing interest in predicting if and when less advantaged urban neighborhoods will experience upsurges in their housing prices, yet little research has investigated year-to-year neighborhood price dynamics. The authors advance knowledge in this realm by employing annually updated, readily available indicators created from the Home Mortgage Disclosure Act and assessor's data from Washington, D.C., census tracts for 1995 to 2005 to estimate a hazard model of the year when consistent, substantial, and sustained housing price appreciation starts in disadvantaged neighborhoods, based on predictors measured one and two years in advance. The results suggest that proximity to stronger neighborhoods, a robust metropolitan housing market, and inflows of higher-status home buyers are key predictors of appreciation onset in disadvantaged neighborhoods, but replications and refinements are needed before firm generalizations about this process can be made.