Urban disruptions and housing market dynamics: evidence from San Francisco
Wan-Hsiu Cheng, Chun-Da Chen, Shih-Chieh ChiuPurpose
This paper aims to examine how urban disruptions, specifically the COVID-19 pandemic and postpandemic urban disorder, affect housing market dynamics in the San Francisco Bay Area. Using a cross-county comparison and the sale-to-list ratio, the study identifies variations in bargaining power, market tightness and sentiment across price segments and housing types, providing evidence on market resilience and informing policies for urban housing stability and equity.
Design/methodology/approach
The authors analyze 108,237 transactions from 2018 to 2023 using two methods to study housing market behavior during two adverse events. The first is a quintile analysis with a generalized linear model, and the second is a two-stage least squares model to address endogeneity.
Findings
The San Francisco housing market shows resilience despite economic disruptions, but the impact of time on market (TOM) varies. While longer TOM can lead to competitive bidding in strong markets, this trend weakens during urban disruptions. Noncondominium properties are particularly affected, especially regarding sales premiums. In contrast, Alameda County follows a conventional pattern where longer TOM indicates weaker demand. These findings emphasize how external shocks and urban conditions alter market signals and bargaining dynamics.
Practical implications
Postpandemic housing market adjustments vary sharply by location and socioeconomic status. In San Francisco, housing shortages and worsening urban disamenities intensify affordability pressures, while remote-work flexibility has accelerated middle-income migration to suburban areas such as Alameda County. Continued outmigration may weaken the urban middle class and long-term fiscal sustainability, highlighting the need for coordinated policies that improve livability and expand housing supply.
Originality/value
This study effectively combines insights from pandemic and urban policy shocks with cross-county comparisons, demonstrating how local disruptions can significantly transform housing market bargaining, enhance resilience and create impactful spatial spillovers.