A0540
Title: Sunset, the dwelling-specific condition, and socio-economic drivers of housing prices in a Norwegian urban area
Authors: Ingrid Sandvig Thorsen - University of Bergen (Norway) [presenting]
Baard Stove - University of Bergen (Norway)
Kristian Gundersen - University of Bergen (Norway)
Abstract: The effect of sunshine and the condition of real estate in the Norwegian housing market is studied. The correlation between local housing prices and the socioeconomic makeup of a neighborhood is also studied. Spatial Gaussian Markov random field (GMRF) models are used to account for dependence between observations, also incorporating a set of other attributes as standard covariates. The sunshine property experience is based solely on the landscape aspect, i.e., buildings and obstacles that potentially cast shadow on the property are not considered. In the Norwegian housing market, a condition report of the real estate is mandatory for a legal transaction. The condition of a house is assessed by a professional appraiser according to regulations, and different parts of the building are classified into four categories, which in total describe the condition of the real estate. Using house prices from the Bergen municipality, Norway, 2016-2022, the well-known relations are found in hedonic price models, concerning, for instance, age and size of house, lot size, and socioeconomic variables. However, it is also found that the condition of a house affects its price; a positive sunshine effect is documented, and the relationship between local socioeconomic conditions and housing prices is quantified. This is done in a model accounting for the spatial random field. To adjust for spatial confounding issues, a restricted spatial regression model (RSR) is used.
