Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/262049 
Year of Publication: 
2021
Series/Report no.: 
Staff Report No. 999
Publisher: 
Federal Reserve Bank of New York, New York, NY
Abstract: 
We study long-term returns on residential real estate in twenty-seven "superstar" cities in fifteen countries over 150 years. We find that total returns in superstar cities are close to 100 basis points lower per year than in the rest of the country. House prices tend to grow faster in the superstars, but rent returns are substantially greater outside the big agglomerations, resulting in higher long-run total returns. The excess returns outside the superstars can be rationalized as a compensation for risk, especially for higher covariance with income growth and lower liquidity. Superstar real estate is comparatively safe.
Subjects: 
housing returns
housing risk
superstar cities
regional housing markets
JEL: 
G10
G12
N90
R21
R31
Document Type: 
Working Paper

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