Florian Sniekers

job market seminar

Florian Sniekers

University of Amsterdam
Buying first or selling first in housing markets
Joint with
Espen R. Moen, Plamen T. Nenov
Venue

VC Salle A

Centre de la Vieille-Charité - Salle A

Centre de la Vieille Charité
2 rue de la Charité
13002 Marseille

Date(s)
Thursday, January 28 2016| 12:30pm to 2:00pm
Contact(s)

Cecilia Garcia-Peñalosa: cecilia.garcia-penalosa[at]univ-amu.fr

Abstract

Housing transactions by moving owner-occupiers take two steps, purchase of a new property and sale of the old housing unit. This paper shows how the transaction sequence decision of moving homeowners depends on, and in turn, a effects housing market conditions in an equilibrium search model of the housing market. We show that moving homeowners prefer to buy first whenever there are more buyers than sellers in the market. This behavior leads to multiple steady state equilibria and to self-fulfilling fluctuations in prices and time-on-market. Equilibrium switches create large fluctuations in the housing market, which are broadly consistent with stylized facts on the housing cycle.