Heterogeneous Real Estate Agents and the Housing Cycle
Sophia Gilbukh and
Additional contact information
Sophia Gilbukh: Baruch College, CUNY
No 932, 2019 Meeting Papers from Society for Economic Dynamics
The real estate market is highly intermediated, with 90% of buyers and sellers hiring an agent to help them transact a house. However, low barriers to entry and fixed commission rates result in a market where inexperienced intermediaries have a large market share, especially following house price booms. Using rich micro-level data on 10.4 million listings, we show that seller agents’ experience is an important determinant of client outcomes, particularly during real estate busts. Houses listed for sale by inexperienced agents spend more time on the market and have a lower probability of selling. We then study the aggregate implications of the agents’ experience distribution on real estate market liquidity by building a theoretical entry and exit model of real estate agents with aggregate shocks. Several policies that raise the barriers to entry for agents are considered: 1) increased entry costs; 2) lower commission rates; and 3) more informed clients. Across each counterfactual, increasing barriers to entry shift the distribution of agents across experience to the right, improves liquidity, and reduces the amplitude of liquidity cycles in the housing market.
New Economics Papers: this item is included in nep-dge and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Working Paper: Heterogeneous Real Estate Agents and the Housing Cycle (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:red:sed019:932
Access Statistics for this paper
More papers in 2019 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().