The Spatial Structure of Housing Prices in Madrid: Evidence from Spatio-temporal Scan Statistics

We apply spatio-temporal scan statistics on the distributions of asking price per meter squared for various segments of the housing market (attics, houses, flats of various sizes) in the city of Madrid for 5 years during the period 2008–2019. Our application shows how spatio-temporal scan statistics can be useful for assessing the dynamics of urban spatial structure analyzed through the lens of housing prices. The focus on the post-2008 period and the computation of prospective clusters allows to detect the winners and the losers of the 2008 real estate crisis and to uncover new trends during the post-crisis period. We show that the economic crisis in Madrid has had a strong impact on housing market with increased polarization between the center and the periphery and between the northern and southern areas of Madrid, with some heterogeneity depending on the neighborhood, on the market segment, and on the urban policies undertaken.