Review of Financial Studies Vol. 37 No. 11 2024
Heterogeneous Real Estate Agents and the Housing Cycle
open access
Abstract
The real estate market is highly intermediated, with 90% of buyers and sellers hiring an agent. However, low barriers to entry and fixed commission rates result in large market share for inexperienced intermediaries. Using micro-level data on 8.5 million listings and a novel research design, we show that house listings by inexperienced agents have a lower probability of selling, and this effect is strongest during the housing bust. We estimate that 3.7% more listings would have been sold in a flexible commission equilibrium. Eighty percent of this improvement comes from competition and the remainder from commission variation across experience.
- DOI
- 10.1093/rfs/hhae048
- Volume
- 37
- Issue
- 11
- Pages
- 3431-3489
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref