 Speculators and Middlemen: The Role of Flippers in the Housing MarketPatrick Bayer, Christopher Geissler and James W. Roberts No 11-03, Working Papers from Duke University, Department of Economics Abstract: In thinly traded markets for heterogenous, durable goods, such as housing, intermediaries may play especially important roles. Using a unique micro-level dataset of housing transactions in Los Angeles from 1988-2008 and a novel research design, we identify and measure the importance of two very distinct types of intermediaries, also known as "flippers". The first type act as middlemen who quickly match sellers and buyers, operate throughout housing market cycles and earn above average returns when they buy and sell. The second type act as speculators who attempt to time markets by holding assets for longer periods of time, perform relatively poorly when buying and selling and are strongly associated with price instability in their targeted areas. The presence of these unsophisticated speculators and positive feedback trading contribute the first pieces of evidence from the housing market to a growing body of work in other financial markets that questions whether speculators always act to stabilize prices. Keywords: Speculation; Housing Markets; Asset Pricing; Behavioral Finance; Financial Intermediaries; Middlemen (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:duk:dukeec:11-03 Access Statistics for this paper More papers in Working Papers from Duke University, Department of Economics Department of Economics Duke University 213 Social Sciences Building Box 90097 Durham, NC 27708-0097. |
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