On the Determinants of House Value Volatility

Few studies have analyzed the determinants of house value volatility at the level of individual houses. This paper uses two panels of the American Housing Survey covering 1974-2003 to test four hypotheses related to the determinants of house value volatility. The findings are that 1) house values at both ends of the quality distribution have greater variance than those with average quality levels, 2) the more atypical a house is, the greater the variance of house value, 3) the more highly "land leveraged" a house is, the greater the variance of its value, and 4) house values owned by minority households have greater variance than those of whites.