The ins and outs of selling houses: understanding housing-market volatility

Ngai, L. Rachel and Sheedy, Kevin D. ORCID: 0000-0002-0247-6323 (2024) The ins and outs of selling houses: understanding housing-market volatility. International Economic Review. ISSN 0020-6598

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Abstract

This article documents the role of inflows (new listings) and outflows (sales) in explaining the volatility and comovement of housing-market variables. An “ins versus outs” decomposition shows that both flows are quantitatively important for housing-market volatility. The correlations between sales, prices, new listings, and time-to-sell are stable over time, whereas the signs of their correlations with houses for sale are found to be time-varying. A calibrated search-and-matching model with endogenous inflows and outflows and shocks to housing demand matches many of the stable correlations and predicts that the correlations with houses for sale depend on the source and persistence of shocks.

Item Type:	Article
Official URL:	https://onlinelibrary.wiley.com/journal/14682354
Additional Information:	© 2024 The Authors
Divisions:	Economics
Subjects:	H Social Sciences > HB Economic Theory H Social Sciences > HD Industries. Land use. Labor
JEL classification:	R - Urban, Rural, and Regional Economics > R3 - Production Analysis and Firm Location > R31 - Housing Supply and Markets E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E32 - Business Fluctuations; Cycles R - Urban, Rural, and Regional Economics > R2 - Household Analysis > R21 - Housing Demand E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Employment, and Investment > E22 - Capital; Investment (including Inventories); Capacity
Date Deposited:	23 Jan 2024 15:48
Last Modified:	01 Apr 2024 08:40
URI:	http://eprints.lse.ac.uk/id/eprint/121451

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