Impact of transportation on the property market at the national level: case of the USA

Purpose The purpose of this paper is to provide a high-level summary of the results of region-specific studies pertaining to the interaction between transportation and property market. The authors intend to do so by studying the relationship between transportation volume/construction and housing market indicators at the national level, in this case, the USA. Design/methodology/approach This paper, through a combination of Granger causality test and vector error correction model (VECM), explores the time-lagged impact of fluctuation in volume of air transportation, vehicular transportation, passenger rail, public transit and transportation construction on housing value, supply and market hotness. Findings Impulse-response analysis generated via VECM indicated that shocks in transportation volume and related construction value added is associated with long-run negative responses with housing value/supply/market hotness. Development-type-specific analysis indicated that transportation volume escalation harmed exclusively the supply of development of five units and more. The findings governing location-specific studies, specifically property markets declining with higher demand for travel and access to mobility facilitating migration from dense areas to lower density communities, are expandable as national level phenomenon. Originality/value The paper’s findings contradict that of many studies done on regional contexts: although access to transportation stimulates local property market, at the national level additional transportation provides population migration options and may shift total surplus to the consumer’s side and cause seller’s side to cool.