The Last Broker: Information Externalities, Tipping Points, and Housing Market Death

Chihiro Shimizu

No DP26-10, RCESR Discussion Paper Series from Research Center for Economic and Social Risks, Institute of Economic Research, Hitotsubashi University

Abstract: We develop a dynamic theory of housing market collapse in which population decline interacts with information friction to produce irreversible market death. Declining transactions raise valuation uncertainty, eroding broker profitability and eliminating the intermediation channel through which most transactions are completed. We embed Jovanovic (1982)- Hopenhayn (1992) industry dynamics with forward-looking broker value functions and establish three main theorems, each proved in full: a tipping-point theorem characterising the separatrix between functioning and dead-market attractors; a dual-exit acceleration theorem showing that economic and demographic exit interact multiplicatively to compress the collapse timeline; and a welfare theorem establishing that disclosure is socially underprovided, with a convex marginal social benefit. The model delivers sharp monotone comparative statics throughout.

Keywords: Housing market death; broker exit; information externalities; tipping points; dual-exit dynamics; akiya crisis (search for similar items in EconPapers)
JEL-codes: D83 D92 J11 R21 R23 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2026-03
New Economics Papers: this item is included in nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:hit:rcesrs:dp26-10

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