OPPORTUNISTIC MATCHING IN THE HOUSING MARKET
James Albrecht (),
Axel Anderson (),
Eric Smith () and
Susan Vroman ()
International Economic Review, 2007, vol. 48, issue 2, 641-664
We construct a model of the housing market in which agents differ in their flow values while searching. Agents enter the market relaxed (with high flow values) but move to a desperate state (low flow values) at a Poisson rate if they have not already transacted. We characterize the equilibrium steady-state matching pattern and the joint distribution of price and time to sale (for sellers). The expected price conditional on time to sale falls with time spent on the market, whereas the conditional variance of price first rises and then falls with time on the market. Copyright 2007 by the Economics Department Of The University Of Pennsylvania And Osaka University Institute Of Social And Economic Research Association.
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