The former have laid particular emphasis on the investment aspects of housing, using life-cycle models. Very little attention is paid to the spatial dimension. In the urban economics literature, the spatial aspects are central, for example, through residential location theories. But the regional house price modelling literature shares more similarities with the macro than the urban literature. At the current time, the theory underlying most regional house price models in the UK is identical to that in national models.
Spatial aspects are essentially an add-on.
However, most modern studies are based on life-cycle models of household behaviour which allow both consumption and investment aspects of housing demand to be captured. Regional models generally use the same theoretical framework. Such models also provide the basis for tests of housing market efficiency i.e. whether house prices reflect all available information in the market. Both the extensive US literature and the more limited UK literature suggest that housing markets may be inefficient. The existence of high transactions costs is one explanation.