The Market for Real Estate Brokerage Services in Low- and High-Income Neighborhoods: A Six-City Study

Aaron Yelowitz, Frank Scott, University of Kentucky
Jason Beck, Armstrong Atlantic State University

In this article, we examine the market structure for real estate brokerage services across six large metropolitan statistical areas (MSAs) to see whether low-income neighborhoods, or neighborhoods where house prices are low, are as well served by real estate professionals as higher income or higher priced neighborhoods. We collect more than 300,000 real estate listings and compute the Herfindahl-Hirschman Index for each ZIP Code neighborhood in each MSA. When we divide neighborhoods based on income, house value, and race, we find no evidence that access is worse in disadvantaged areas; that is, the market structure for brokerage services is at least as competitive in less advantaged neighborhoods. We also analyze market leaders in the six MSAs and find that some firms, however, specialize in particular market segments.