Impacts of the COVID-19 Pandemic on House Prices: Heterogeneous Impacts over Time and across the House Price Distribution

This study examines the impacts of the COVID-19 pandemic on house prices over time for the Fargo-Moorhead-West Fargo MSA of North Dakota and Minnesota. We examine overall trends by estimating an OLS hedonic model and dig deeper into the heterogeneity of price trends across the house price distribution using an unconditional quantile hedonic price model. We find that house prices increased in the MSA by about 2.5 percent during a period when an executive order closing non-essential businesses was in effect and another 1 percent during the period after the executive order expired. Moreover, we find that the price increase occurring during the period when the executive order was in place was concentrated in the lower priced portion of the house price distribution, while the price impact after the executive order expired was more widespread. Combined with data on listings, sales, and average time on market, our results suggest that the price effects during the executive order period were primarily the result of a decrease in housing supply, while the post order price effects reflect a combination of the supply decrease and an increase in housing demand.