  We investigate whether pandemic-induced contagion disamenities and income
effects arising due to COVID-related unemployment adversely affected real
estate prices of one- or two-family owner-occupied properties across New York
City (NYC). First, OLS hedonic results indicate that greater COVID case numbers
are concentrated in neighborhoods with lower-valued properties. Second, we use
a repeat-sales approach for the period 2003 to 2020, and we find that both the
possibility of contagion and pandemic-induced income effects adversely impacted
home sale prices. Estimates suggest sale prices fell by roughly $60,000 or
around 8% in response to both of the following: 1,000 additional infections per
100,000 residents; and a 10-percentage point increase in unemployment in a
given Modified Zip Code Tabulation Area (MODZCTA). These price effects were
more pronounced during the second wave of infections. Based on cumulative
MODZCTA infection rates through 2020, the estimated COVID-19 price discount
ranged from approximately 1% to 50% in the most affected neighborhoods, and
averaged 14%. The contagion effect intensified in the more affluent, but less
densely populated NYC neighborhoods, while the income effect was more
pronounced in the most densely populated neighborhoods with more rental
properties and greater population shares of foreign-born residents. This
disparity implies the pandemic may have been correlated with a wider gap in
housing wealth in NYC between homeowners in lower-priced and higher-priced
neighborhoods.
