Abstract
Three striking empirical regularities have been repeatedly reported: the positive correlation between housing prices and trading volume, and between housing price and time-on-the-market (TOM), and the existence of price dispersion. This short paper provides perhaps the first unifying framework which mimics these phenomena in a simple competitive search framework. In the equilibrium, sellers with heterogeneous waiting costs and buyers are endogenously segregated into different submarkets, each with distinct market tightness and prices. With endogenous search efforts, our model also reproduces the well-documented price-volume correlation. Directions for future research are also discussed.
| Original language | English |
|---|---|
| Pages (from-to) | 311-329 |
| Journal | International Real Estate Review |
| Volume | 14 |
| Issue number | 3 |
| DOIs | |
| Publication status | Published - 1 Dec 2011 |
Bibliographical note
Publication details (e.g. title, author(s), publication statuses and dates) are captured on an “AS IS” and “AS AVAILABLE” basis at the time of record harvesting from the data source. Suggestions for further amendments or supplementary information can be sent to [email protected].Research Keywords
- Competitive search
- Housing market
- Price dispersion
- Time on the market
- Trading volume
