is associated with a 0.61% increase in home values.
User costs: Every 1% increase in user costs (taxes, maintenance, etc.)
depresses values by 1.2%.
Construction costs: The higher they are, the more expensive they are.
Population: This matters, but only in areas where land supply is inelastic
(like San Francisco or New York, as opposed to Dallas).
In the short term, there are a few other factors, including:
Health of the mortgage market.
...the model predicts sizable house price declines for Portland,
New York and Atlanta during the next two years.
...New York is estimated to be 26% above its equilibrium price
and a correction of this large overvaluation leads to falling house prices
despite growing income in the metro area.
In Atlanta, an overhang of excess supply of vacant homes
dominates other contributing factors
and depresses house price appreciation in the next two years.