Buying First or Selling First in Housing Markets

Moen, Espen Rasmus; Nenov, Plamen; Sniekers, Florian
Journal article, Peer reviewed
Accepted version
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URI
https://hdl.handle.net/11250/2727780
Date
2019
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Original version
Journal of the European Economic Association. 2019   10.1093/jeea/jvz069
Abstract
Housing transactions by moving homeowners take two steps—buying a new house and selling the old one. This paper argues that the transaction sequence decisions of moving homeowners have important effects on the housing market. Moving homeowners prefer to buy first whenever there are more buyers than sellers in the market. However, this congests the buyer side of the market and increases the buyer–seller ratio, further strengthening the incentives of other moving owners to buy first. This endogenous strategic complementarity leads to multiple steady state equilibria and large fluctuations, which are broadly consistent with stylized facts about the housing cycle.
 
Buying First or Selling First in Housing Markets
 
Publisher
Oxford Uni. Press
Journal
Journal of the European Economic Association
Copyright
The authors retain rights to “upload their accepted manuscript PDF ("a post-print*") to institutional and/or centrally organized repositories, but must stipulate that public availability be delayed until 24 months after first online publication in the journal.”