Heterogeneous Real Estate Agents and the Housing Cycle

Sonia Gilbukh and Paul Goldsmith-Pinkham

The Review of Financial Studies, 2024, vol. 37, issue 11, 3431-3489

Abstract: The real estate market is highly intermediated, with 90% of buyers and sellers hiring an agent. However, low barriers to entry and fixed commission rates result in large market share for inexperienced intermediaries. Using micro-level data on 8.5 million listings and a novel research design, we show that house listings by inexperienced agents have a lower probability of selling, and this effect is strongest during the housing bust. We estimate that 3.7% more listings would have been sold in a flexible commission equilibrium. Eighty percent of this improvement comes from competition and the remainder from commission variation across experience.

Keywords: G5; R3 (search for similar items in EconPapers)
Date: 2024
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