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The Housing Market(s) of San Diego

Author

Listed:
  • Monika Piazzesi

    (Stanford)

  • Martin Schneider

    (Stanford)

  • Tim Landvoigt

    (Stanford)

Abstract

We study a quantitative asset pricing model with a continuum of house types. Equilibrium house prices match the inventory of available houses and housing demand from households that differ by age, income, wealth, and access to credit markets. The shape of the house price function reflects households' preferences across segments of the housing market in a nonlinear way. This is in contrast to the standard model with homogenous housing capital where Euler equations of all households help determine the per-unit price of housing capital. To implement the model quantitatively, we measure the inventory of houses and the distribution of household characteristics using micro data on the San Diego Metro Area during the recent boom-bust episode. We show that easier access to credit for poor agents played an important role in driving up house prices for low quality housing, but did not matter much for the overall price level.

Suggested Citation

  • Monika Piazzesi & Martin Schneider & Tim Landvoigt, 2010. "The Housing Market(s) of San Diego," 2010 Meeting Papers 1309, Society for Economic Dynamics.
  • Handle: RePEc:red:sed010:1309
    as

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    References listed on IDEAS

    as
    1. Jack Favilukis & Sydney C. Ludvigson & Stijn Van Nieuwerburgh, 2017. "The Macroeconomic Effects of Housing Wealth, Housing Finance, and Limited Risk Sharing in General Equilibrium," Journal of Political Economy, University of Chicago Press, vol. 125(1), pages 140-223.
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    8. Monika Piazzesi & Martin Schneider, 2009. "Momentum Traders in the Housing Market: Survey Evidence and a Search Model," American Economic Review, American Economic Association, vol. 99(2), pages 406-411, May.
    9. Caplin, Andrew & Leahy, John, 2014. "A graph theoretic approach to markets for indivisible goods," Journal of Mathematical Economics, Elsevier, vol. 52(C), pages 112-122.
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    More about this item

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - General

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