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  • Summer 2013
  • Article
  • Real Estate Economics

Real Estate Prices During the Roaring Twenties and the Great Depression

By: Tom Nicholas and Anna Scherbina
  • Format:Print
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Abstract

Using new data on market-based transactions we construct real estate price indexes for Manhattan between 1920 and 1939. During the 1920s prices reached their highest level in the third quarter of 1929 before falling by 67% at the end of 1932 and hovering around that value for most of the Great Depression. The value of high-end properties strongly co-moved with the stock market between 1929 and 1932. A typical property bought in 1920 would have retained only 56% of its initial value in nominal terms two decades later. An investment in the stock market index (including dividends) would have outperformed an investment in a typical property (including net rental income), by a factor of 5.2 over our time period.

Keywords

Property; Market Transactions; Price; Value; Financial Crisis; Investment; Real Estate Industry; New York (state, Us)

Citation

Nicholas, Tom, and Anna Scherbina. "Real Estate Prices During the Roaring Twenties and the Great Depression." Real Estate Economics 41, no. 2 (Summer 2013): 278–309.
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About The Author

Tom Nicholas

Entrepreneurial Management
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More from the Authors
  • Barbarians at the Gate or Turnaround Gurus? Private Equity and the Rise of the LBO By: Tom Nicholas and John Masko
  • Status and Mortality: Is There a Whitehall Effect in the United States? By: Tom Nicholas
  • When Institutions Fail: HIV/AIDS in the 1980s By: Tom Nicholas and Christian Godwin
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