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Spatial distribution of housing liquidity

Author

Listed:
  • Osswald do Amaral, Francisco
  • Toth, Mark
  • Zdrzalek, Jonas

Abstract

This paper examines the relation between location, liquidity, and prices in urban housing markets. We build geospatial datasets for German and U.S. cities and show that housing liquidity and prices jointly decrease with distance to the city center. Using transaction-level data, we estimate a spatial housing search model and show that the cost of travel to the city center determines the joint spatial distribution of housing liquidity and prices. In a counterfactual analysis, we find that frictional illiquidity lowers prices in the outskirts by 7% relative to the city center and explains 19% of the spatial price gradient.

Suggested Citation

  • Osswald do Amaral, Francisco & Toth, Mark & Zdrzalek, Jonas, 2025. "Spatial distribution of housing liquidity," Kiel Working Papers 2284, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkwp:315471
    as

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    References listed on IDEAS

    as
    1. Mark A. Andor & Andreas Gerster & Kenneth T. Gillingham & Marco Horvath, 2020. "Running a car costs much more than people think — stalling the uptake of green travel," Nature, Nature, vol. 580(7804), pages 453-455, April.
    2. Krainer, John, 2001. "A Theory of Liquidity in Residential Real Estate Markets," Journal of Urban Economics, Elsevier, vol. 49(1), pages 32-53, January.
    3. Paul E. Carrillo, 2012. "An Empirical Stationary Equilibrium Search Model Of The Housing Market," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 53(1), pages 203-234, February.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    housing liquidity; housing prices; cities; spatial equilibrium; housing demand;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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