The Congress for New Urbanism has commissioned this research paper to analyze how variation in urban form and composition may be influencing the relative performance of local residential markets during the recent and unprecedented downturn in the U.S. housing market. In particular, this report analyzes how varying levels of house price declines are correlated with varying characteristics of New Urbanist principles: walkability, central location, density, a mixture of uses and access to public transportation. Comparing house price declines across metro areas and then examining Zip-level house price declines in the Philadelphia metro area from the market’s peak in 2007 to its trough in 2012, the following results were identified: The magnitude of house price declines have not only varied significantly across metropolitan areas, but have also varied significantly across metropolitan areas with similar urban forms. Both Dallas and Tampa would qualify as having a sprawling urban form, but Dallas has had among the smallest declines while Tampa has had declines that significantly exceed the national average. Similarly, it among the least price deflation of any large metro area. Likewise, both Boston and San Francisco are older cities with dense, walkable downtown cores containing a mixture of uses, but Boston’s declines are below the national average while San Francisco’s exceeds it.  Since it would appear that the relationship between market performance, geography and urban form is more nuanced than simply comparing appreciation rates at the metropolitan level can provide insight to, this paper examines house price performance house price performances within metro areas, using the Philadelphia metro area as a case study.

In Philadelphia, during the first housing downturn of 1989-1995, house prices declined the greatest in the core urban center (-33.7% in Center City), second-most in the central city of Philadelphia as a whole (-17.6%) and the least in the lower density areas the suburban counties (-14.3%). But, during the most recent housing downturn of 2007-2012, home price declines have been greatest in the relatively low-density suburbs (-32.7%), second-most in Philadelphia county (-26.7%) and the smallest in the urban core of the Center City (-20.2%). Note that, from the first housing downturn to the second, the spatial pattern of house price declines reversed itself: central, urban locations have held their value better than more peripheral suburban locations during the current downturn than during the last one. • A regression of Zip-level house price declines on Zip-level housing attributes measuring the local housing stock’s density, urban v. suburban location, accessibility to public transportation, a mixture of uses, and socioeconomic traits finds that homes in communities with New Urbanist characteristics have, on average, performed much better during the recent U.S. housing downturn than their counterparts in lower-density, single-use, exurban and auto-oriented communities.