House prices in Sweden: The significance of attributes

The paper describes an empirical study of house prices in Sweden. The purpose is to assess marginal (hedonic) prices of different characteristics of single family houses and to indicate regional variations in these. The method used—regression of house prices on attributes—allows us also to calculate regional prices of a house with a given set of attributes, i.e. comparing prices of identical houses in different regions. On the basis of a large number of sales it is possible to conclude that the real estate markets of Sweden do not differ qualitatively from those of USA and Great Britain. The same types of characteristics seem to have hedonic prices. The most important are the size of the building and the lot, the age of the real estate, the quality of its interior, and its location both in terms of accessibility and social environment. Regional variation in prices of ‘identical’ houses are substantial. The price level of the most expensive region is three times the price level of the cheapest region. Implicit prices on attributes also vary regionally, most pronounced in the cases of social environment, lot size, accessibility and living space.