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The Ins and Outs of Selling Houses

Author

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  • Kevin Sheedy

    (London School of Economics)

  • Rachel Ngai

    (London School of Economics)

Abstract

The number of houses for sale is as volatile as sales volume and much more volatile than house prices, yet it has received relatively little attention. What drives volatility in the number of houses for sale? Is it due to changes in the difficulty of selling houses or changes in the incentive to put houses up for sale? This paper presents evidence that both inflows and outflows are important using a variance decomposition. It then uses a search-and-matching model with both the decision of when to agree a sale (outflows) and the decision of when to put a house up for sale (inflows) to understand the behaviour of sales, listings, and prices in the housing market. Quantitatively, the model does a much better job of matching relative volatility and correlations between housing-market variables than those that abstract from the inflow decision.

Suggested Citation

  • Kevin Sheedy & Rachel Ngai, 2015. "The Ins and Outs of Selling Houses," 2015 Meeting Papers 214, Society for Economic Dynamics.
    • Handle: RePEc:red:sed015:214
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. The Ins and Outs of Selling Houses
      by Christian Zimmermann in NEP-DGE blog on 2015-08-11 18:06:33

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    Cited by:

    1. Gan, Li & Wang, Pengfei & Zhang, Qinghua, 2018. "Market thickness and the impact of unemployment on housing market outcomes," Journal of Monetary Economics, Elsevier, vol. 98(C), pages 27-49.
    2. Eric Smith, 2020. "High and Low Activity Spells in Housing Markets," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 36, pages 1-28, April.
    3. Gabrovski, Miroslav & Ortego-Marti, Victor, 2019. "The cyclical behavior of the Beveridge Curve in the housing market," Journal of Economic Theory, Elsevier, vol. 181(C), pages 361-381.
    4. Carlos Garriga & Aaron Hedlund, 2020. "Mortgage Debt, Consumption, and Illiquid Housing Markets in the Great Recession," American Economic Review, American Economic Association, vol. 110(6), pages 1603-1634, June.
    5. Yu Zhu & Randall Wright & Damien Gaumont, 2017. "Modeling House Prices," 2017 Meeting Papers 744, Society for Economic Dynamics.
    6. repec:esx:essedp:775 is not listed on IDEAS

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