COVID 19 Infects Real Estate Markets: Short and Mid Run Effects on Housing Prices in Campania Region (Italy)
The COVID 19 (also called "SARS CoV 2" pandemic is causing a dramatic reduction in consumption, with a further drop in prices and a decrease in workers' per capita income. To this will be added an increase in unemployment, which will further depress consumption. The real estate market, as for other productive and commercial sectors, in the short and mid run, will not tend to move independently from the context of the aforementioned economic variables. The effect of pandemics or health emergencies on housing markets is an unexplored topic in international literature. For this reason, firstly, the few specific studies found are reported and, by analogy, studies on the effects of terrorism attacks and natural disasters on real estate prices are examined too. Subsequently, beginning from the real estate dynamics and economic indicators of the Campania region before the COVID 19 emergency, the current COVID 19 scenario is defined (focusing on unemployment, personal and household income, real estate judicial execution, real estate dynamics) Finally, a real estate pricing model is developed, evaluating the short and mid run COVID 19 effects on housing prices. To predict possible changes in the mid run of real estate judicial execution and real estate dynamics, the economic model of Lotka Volterra (also known as the "prey predator" model) was applied. Results of the model indicate a housing prices drop of 4.16% in the short run and 6.49% in the mid run (late 2020 early 2021)