Does a dramatic drop in crime lead to an increase in property values? To date, the literature on how crime influences property values has focused solely within a single metropolitan area and has been limited primarily to cross-sectional analysis. In this study we exploit the dramatic, nationwide decrease in crime that occurred in the 1990s to examine the relationship between changes in crime rates and property values. To do this, we compile information on changes in property values and crime during the 1990s in nearly 3000 urban zip codes throughout the U.S. Using a fixed-effects framework as well as an instrumental variables strategy, our analysis implies a large and statistically significant association between crime and property values. The estimated elasticities of property values with respect to crime range from − 0.15 to − 0.35. Furthermore, zip codes in the top decile in terms of crime reduction saw property value increases of 7–19% during the 1990s. Both the empirical analysis and a graphical analysis are suggestive that decreasing crime leads to increasing property values. Highlights ► We exploit the sharp decrease in crime in the 1990s to examine the relationship between crime and property values. ► Information on changes in property values and crime in nearly 3000 U.S. zip codes are used to conduct the analysis. ► Our analysis implies a large and statistically significant association between crime and property values. ► The top decile of zip codes (in terms of crime reduction) saw property value increases between 7 and 19% during the 1990s.