How do pandemics affect urban housing markets? This paper studies historical outbreaks of the plague in 17th-century Amsterdam and cholera in 19th-century Paris to answer this question.
Based on micro-level transaction data, Marc Franke and Matthijs Korevaar show outbreaks resulted in large declines in house prices, and smaller declines in rent prices. They find particularly large reductions in house prices during the first six months of an epidemic, and in heavily-affected areas. However, these price shocks were only transitory, and both cities quickly reverted to their initial price paths. The findings suggest these two cities were very resilient to major shocks originating from epidemics.