Agglomeration effects and liquidity gradients in local rental housing markets

The last essay analyzes the impact of nearby located urban agglomeration centers on local rental housing market liquidity. The empirical findings suggest a negative liquidity gradient, implying a decrease in local market liquidity with increasing geographic distance from the agglomeration center. The results indicate positive agglomeration externalities on liquidity in the urban rental market. Relative to the urban center, the effect attenuates with increasing distance. From the relation between rental price offers and market liquidity, the price impact of illiquidity is inferred. Illiquid markets imply lower rents. Furthermore, the time on the market for individual properties is longer in illiquid compared to liquid markets.