Hot and Cold Seasons in the Housing Market

Liwa Rachel Ngai () and Silvana Tenreyro

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: Every year during the second and thirdquarters (the "hot season") housing markets in the UKand the US experience systematic above-trend increases in both prices and transactions.During the fourth and first quarters (the "cold season"), house prices and transactions fallbelow trend. We propose a search-and-matching framework that sheds new light on themechanisms governing housing market fluctuations. The model has a "thick-market" effectthat can generate substantial differences in the volume of transactions and prices acrossseasons, with the extent of seasonality in prices depending crucially on the bargaining powerof sellers. The model can quantitatively mimic the seasonal fluctuations in transactions andprices observed in the UK and the US.

Keywords: housing market; thick-market effects; search-and-matching; seasonality; house price fluctuations (search for similar items in EconPapers)
JEL-codes: E0 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge, nep-mac and nep-ure
Date: 2009-04
View list of references

Downloads: (external link)
http://cep.lse.ac.uk/pubs/download/dp0922.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:cep:cepdps:dp0922

Access Statistics for this paper

More papers in CEP Discussion Papers from Centre for Economic Performance, LSE
Series data maintained by ().