HOUSE PRICES, SALES, AND TIME ON THE MARKET: A SEARCH‐THEORETIC FRAMEWORK

Antonia Díaz and Belén Jerez

International Economic Review, 2013, vol. 54, issue 3, 837-872

Abstract: We assess the ability of a standard search and matching framework to account for the cyclical properties of key macroeconomic time series of the housing market. We calibrate a model with aggregate demand and supply shocks to match selected business cycle properties of vacancies and sales in the United States. Our model reproduces the cyclical time series properties of house prices and the positive and negative comovement of prices with sales and time on the market, respectively. Search and matching frictions produce trading delays that augment the volatility of prices and propagate the effect of aggregate shocks to future periods.

Date: 2013
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https://doi.org/10.1111/iere.12019

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Working Paper: House Prices, Sales and Time on the Market: A Search-Theoretic Framework (2009)
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