Lett Spat Resour Sci (2009) 2: 133–147 DOI 10.1007/s12076-009-0030-z ORIGINAL PAPER Predicting housing prices at alternative locations and under alternative scenarios of the spatial job distribution Liv Osland · Inge Thorsen Received: 1 April 2009 / Accepted: 15 September 2009 / Published online: 30 September 2009 © Springer-Verlag 2009 Abstract Alternative hedonic model formulations are used to compare predicted and observed prices of property transactions at alternative locations. The estimation of model parameters is based on data from western Norway. In addition to evaluating the predictability of alternative model formulations we study how housing prices in different areas are affected by changes in the spatial distribution of employment. Al- ternative scenarios of job relocations are considered. We find that the local impact of labor market shocks is negatively related to the degree of urbanization in the rele- vant area. A centralization of job opportunities has a relatively marginal influence on the spatial pattern of house prices, while the reverse is not true for a decentralization of job opportunities. Further, a negative shock gives a quantitatively larger effect on house prices than a corresponding positive shock. Keywords Hedonic model · Housing prices · Predictions · Job accessibility · Spatial interaction JEL Classification R21 · R31 1 Introduction Based on a hedonic model formulation this paper addresses the effects on housing prices of local employment growth or contradictions, and the effects of a redistri- bution of jobs between alternative locations. In evaluating the predictability of the model we also compare predictions of average housing prices to observed average L. Osland ( ) · I. Thorsen Stord/Haugesund University College, Bjørnsonsgt. 45, 5528 Haugesund, Norway e-mail: liv.osland@hsh.no I. Thorsen e-mail: inge.thorsen@hsh.no