American Economic Review Vol. 104 No. 12 2014
Hot and Cold Seasons in the Housing Market
Abstract
Every year housing markets in the United Kingdom and the United States experience systematic above-trend increases in prices and transactions during the spring and summer (“hot season”) and below-trend falls during the autumn and winter (“cold season”). House price seasonality poses a challenge to existing housing models. We propose a search-and-matching model with thick-market effects. In thick markets, the quality of matches increases, rising buyers' willingness to pay and sellers' desire to transact. A small, deterministic driver of seasonality can be amplified and revealed as deterministic seasonality in transactions and prices, quantitatively mimicking seasonal fluctuations in UK and US markets.
- DOI
- 10.1257/aer.104.12.3991
- Volume
- 104
- Issue
- 12
- Pages
- 3991-4026
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref