Values and Prices in the Historic City. Divergences and Value Creation

Analyses of the property market in the historic city often reveal heterogeneous, inconsistent or weak results as to the relationship between property characteristics and ask prices, even in homogeneous neighbourhoods. This phenomenon in the historic city is closely related to the existence of an imperfect real estate market, in which properties are often demanded and offered not only by families, but also by tourists as holiday homes and/or by students. The study proposes a model for analysing the residential property market in the historical centre of Syracuse, namely Ortigia, developed with reference to the Theory on sub-markets analysis. The structure of the model is characterised by spatial clustering based on quartiles of property characteristics, an exploration of the relationship between an aggregate quality index and price/sqm based on simple linear regression, spatial clustering based on the aggregate quality index, and fuzzy clustering. The model found a segmentation of the Ortigia property market based on three sub-markets, which provide details on the relationship between property characteristics and price formation, and between groups of property characteristics that contribute to price formation. Fuzzy clustering helped to highlight the dynamics of an imperfect market such as that of the historic centre of Ortigia.