Speculators and Middlemen: The Strategy and Performance of Investors in the Housing Market

Patrick Bayer, Christopher Geissler, Kyle Mangum and James W. Roberts

No 16784, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Housing market transactions are a matter of public record and thus provide a rare opportunity to analyze the behavior, performance, and strategies of individual investors. Using data for all housing transactions in the Los Angeles area from 1988-2009, this paper provides empirical evidence on investor behavior that is consistent with several rationales for speculative investment in the finance literature, including the roles of middlemen and naïve speculators. Speculative activity by novice investors increased sharply in the recent housing boom. These investors earned little more than the market rate of appreciation and demonstrated no ability to foresee market price movements.

JEL-codes: E3 G01 G1 G12 G14 G28 H7 R0 R21 R31 R51 (search for similar items in EconPapers)
Date: 2011-02
Note: EFG PE
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Citations: View citations in EconPapers (18)

Published as Patrick Bayer & Christopher Geissler & Kyle Mangum & James W Roberts & Andrew Karolyi, 2020. "Speculators and Middlemen: The Strategy and Performance of Investors in the Housing Market," The Review of Financial Studies, vol 33(11), pages 5212-5247.

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Journal Article: Speculators and Middlemen: The Strategy and Performance of Investors in the Housing Market (2020)
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