Anticipated vs. Unanticipated House Price Movements and Transaction Volume
Yavuz Arslan (),
Birol Kanık and
MPRA Paper from University Library of Munich, Germany
Using data from England and Wales, we analyze the relationship between house prices and transaction volume (number of houses sold) and find that there is a negative relationship. When we decompose price changes into anticipated and unanticipated components we find that while anticipated house price changes positively affect transaction volume, unanticipated price changes have a negative effect. These findings give insights for the theories which try to explain the relationship between house prices and transaction volume. Our findings are inconsistent with the down-payment effect approach developed by Stein (1995) and with the loss aversion behavior approach discussed by Genesove and Mayer (2001). However, our results support the evidence of asymmetric decisions on the buyer and seller side documented in Case and Shiller (1988).
Keywords: house prices; expectations; transaction volume (search for similar items in EconPapers)
JEL-codes: D8 G1 R3 (search for similar items in EconPapers)
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Journal Article: Anticipated vs. unanticipated house price movements and transaction volume (2015)
Working Paper: Anticipated vs. Unanticipated House Price Movements and Transaction Volume (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:54641
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