Buying first or selling first in housing markets

Espen Moen; Plamen Nenov; Florian Sniekers

doi:10.1093/jeea/jvz069

Buying first or selling first in housing markets

Espen Moen^*, Plamen Nenov, Florian Sniekers

^*Corresponding author for this work

Research output: Contribution to journal › Article › Scientific › peer-review

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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.

Original language	English
Article number	jvz059
Pages (from-to)	38-81
Journal	Journal of the European Economic Association
Volume	19
Issue number	1
DOIs	https://doi.org/10.1093/jeea/jvz069
Publication status	Published - Feb 2021

Keywords

search frictions
order of transactions
strategic complementarity
coordination
self-fulfilling fluctuations

Access to Document

10.1093/jeea/jvz069

Buying First or Selling First in Housing Markets
This is a pre-copyedited, author-produced version of an article accepted for publication in The Journal of the European Economic Association following peer review. The version of record is available online at: https://doi.org/10.1093/jeea/jvz069.
Accepted author manuscript, 567 KB

https://academic.oup.com/jeea/advance-article/doi/10.1093/jeea/jvz069/5650801?guestAccessKey=4ae11f20-21da-4f64-8d7b-52245ad870ae

1 Article

Eerst kopen of eerst verkopen op de woningmarkt
Moen, E., Nenov, P. & Sniekers, F., 26 Mar 2015, In: Economisch Statistische Berichten. 100, 4706, p. 166-169 4 p.
Research output: Contribution to journal › Article › Professional

Open Access

Buying first or selling first in housing markets
Espen Moen, Plamen Nenov & Florian Sniekers
15/02/15
1 Media contribution
Press/Media: Other

2022 Hicks-Tinbergen Award
Sniekers, Florian (Recipient), Nenov, Plamen (Recipient) & Moen, Espen (Recipient), 23 Aug 2022
Prize

Cite this

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title = "Buying first or selling first in housing markets",

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 ownersto 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.",

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KW - self-fulfilling fluctuations

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Buying first or selling first in housing markets

Abstract

Keywords

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Research output

Eerst kopen of eerst verkopen op de woningmarkt

Press/Media

Buying first or selling first in housing markets

Prizes

2022 Hicks-Tinbergen Award

Cite this