Satisfaction with Neighbors and Neighborhood Housing Prices

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Purpose – The purpose of this study is to test the hypothesis that neighborhoods characterized by satisfying social relationships among residents have higher housing prices than areas where people are less satisfied with their neighbors.Design\textfractionsolidus{}methodology\textfractionsolidus{}approach – A semi‐logarithm regression model is used to test whether the extent of satisfaction with neighbors is significantly related to transaction prices of houses in 59 neighborhoods in Dayton, Ohio.Findings – The results are consistent with, and more specific than, previous studies linking social capital to neighborhood stabilization. Resident satisfaction with their neighbors is found to be an important determinant of property value controlling for housing characteristics.Practical implications – The findings support stabilization and economic development strategies that seek to enhance social relationships in urban neighborhoods.Originality\textfractionsolidus{}value – This study is the first effort to examine the impact of relations among neighbors on housing prices while controlling for traditional housing characteristics. The paper is an important step in unbundling the social capital concept and points policy makers in directions that can improve community property values.



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