Housing Prices and Local Economic Development: The Effects of Recreational CRE Developments of Ski Resorts and Professional Sports Arenas

The relationship between housing prices and local economic development exhibits great importance as both signify strength and growth of local US economies. Therefore, in this paper, I examine the effects of housing prices on local economic development through the channel of recreational commercial real estate (CRE) developments of ski resorts and professional sports arenas. Using updated county-level data, I utilize a two-stage procedural model to first establish correlation between recreational development presence and housing price before analyzing the effects of recreational development as a channel in affecting housing price and Gross Domestic Product (GDP) both aggregately and separately. Through this study, I find GDP and housing price to exhibit a positive relationship with recreational development presence having a significant effect on the relationship and sports arenas being more impactful than ski resorts. Therefore, the results of this paper can suggest ways that local governments can improve economic development through focusing on the housing sector and the ways recreational developments can drive both housing price and economic growth.