Housing Price Gradients in Mexico City During the COVID-19 Pandemic

With Diego Mayorga and Karla Neri Hernández

The COVID-19 pandemic flattened the negative relationship between distance to the city center and housing prices in developed-country cities, increasing the prices in suburbs while decreasing them in central areas. We showthat this relationship flattening did not occur in Mexico City. We estimate the slope of the housing price gradient with respect to the distance to the center and to employment density using administrative and survey data on housing prices in Mexico City from 2019 Q1 to 2022 Q4. Ourestimates rule out statistically significant changes in the slope of the housing price gradient after 2020 Q1 with respect to the pre-pandemic period. We outline possible mechanisms behind this lack of gradient change, such as differences in pandemic restrictions relative to other countries, a reduced potential for remote work, lack of access to finance housing purchases, and supply shocks in the suburbs.