Compact, mixed-income performed better in housing downturn, study shows

Low-density suburbs lost more value than walkable neighborhoods in the housing downturn — and low-income city neighborhoods also suffered, according to a study of the Philadelphia region funded by the Congress for the New Urbanism.

The study looked for reasons for variability in price performance and found new urban characteristics such as density, mixed-use, diversity in income, and access to transit play a role.

The $10,000 study,  “The Correlates of House Price Changes With Design, Density and Use: Evidence From Philadelphia,” examined about a quarter million transactions in 340 zip codes in the region during 2007-2012. The author is Kevin Gillen, an economist and senior research consultant at the University of Pennsylvania’s Fels Institute.

Major findings:

• The suburbs performed less well than the city. Price declines were higher in the relatively low-density suburbs (32.7 percent),  and less in City of Philadelphia (26.7 percent). In Center City, prices declined as little as 1.9 percent in one case and 20 percent on average — less than the regional average. That’s despite the fact that this area saw the greatest increase in supply in the form of new condominiums, Gillen says, which should have depressed prices.

• Some suburbs did relatively well.

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