Hot and cold seasons in the housing market

Ngai, L. Rachel ORCID: 0009-0005-1605-856X and Tenreyro, Silvana ORCID: 0000-0002-9816-7452 (2009) Hot and cold seasons in the housing market. CEP Discussion Papers (922). London School of Economics and Political Science. Centre for Economic Performance, London, UK.

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Abstract

Every year during the second and thirdquarters (the “hot season”) housing markets in the UK and the US experience systematic above-trend increases in both prices and transactions. During the fourth and first quarters (the “cold season”), house prices and transactions fall below trend. We propose a search-and-matching framework that sheds new light on the mechanisms governing housing market fluctuations. The model has a “thick-market” effect that can generate substantial differences in the volume of transactions and prices across seasons, with the extent of seasonality in prices depending crucially on the bargaining power of sellers. The model can quantitatively mimic the seasonal fluctuations in transactions and prices observed in the UK and the US.

Item Type:	Monograph (Discussion Paper)
Official URL:	http://cep.lse.ac.uk/_new/publications/series.asp?...
Additional Information:	© 2009 the authors
Divisions:	Centre for Economic Performance Economics
Subjects:	H Social Sciences > HC Economic History and Conditions
JEL classification:	E - Macroeconomics and Monetary Economics > E0 - General
Date Deposited:	14 Oct 2009 14:05
Last Modified:	11 Dec 2024 18:56
URI:	http://eprints.lse.ac.uk/id/eprint/25497

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