The Hedonic Pricing Model Applied to the Housing Market

This study applies a hedonic pricing model to the housing market of the City of Savannah, Georgia. The Savannah Historic Landmark District is located both in and adjacent to downtown Savannah. Of the 2,888 single-family homes for the period 2000-2005 for which data are available, 591 are located in the Historic District. The model of the real sales price of a single-family house in the City of Savannah environment reveals it is positively affected by the number of bathrooms, fireplaces, bedrooms, stories in structure, garage car spaces, square feet of finished living space, the presence of a deck, a private courtyard, a pool and/or hot-tub, an exterior construction of brick or stucco, the presence of an underground sprinkler system, and whether the house was new. Six spatial control variables are considered. Locations across from or adjacent to open space carry premia, as do locations on cul-de-sacs or lakes. Corner properties do not. In addition, proximity to an apartment complex is capitalized as a negative quantity, as do locations on a busy street. The real sales prices of residential properties that closed during May or July tend to be higher. In addition, houses designated as a national historical monument tend to carry with them a modest price premium, as do properties that are simply located within the Savannah Historic Landmark District.