Does crime impact real estate prices? An assessment of accessibility and location1

Properties located in areas with good accessibility tend to be highly valued in the housing market. Yet, good accessibility may also mean more social interaction, consequently more crime, which under certain circumstances pulls housing prices down. In this study, we assess the impact on housing prices of crime mediated by accessibility. The coordinates of properties sold in the Stockholm metropolitan area are combined in a database with the characteristics of each property and its neighborhood, including burglary rates. After accounting for the possible endogeneity of crime and housing attributes, findings confirm that burglary reduces housing prices. In particular, in a location far from the central business district, regardless of accessibility, residential burglary has a negative impact on apartment prices. However, for apartments in areas with relatively good accessibility near the central business district, burglary has no effect on prices, while for apartments in areas with poor accessibility, burglary helps reduce prices.QC 20180903