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Hot and cold seasons in the housing market

Ngai, L. Rachel and Tenreyro, Silvana ORCID: 0000-0002-9816-7452 (2014) Hot and cold seasons in the housing market. American Economic Review, 104 (12). pp. 3991-4026. ISSN 0002-8282

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Identification Number: 10.1257/aer.104.12.3991


Every year housing markets in the United Kingdom and the United States experience systematic above-trend increases in prices and transactions during the spring and summer ("hot season") and below-trend falls during the autumn and winter ("cold season"). House price seasonality poses a challenge to existing housing models. We propose a search-and-matching model with thick-market effects. In thick markets, the quality of matches increases, rising buyers' willingness to pay and sellers' desire to transact. A small, deterministic driver of seasonality can be amplified and revealed as deterministic seasonality in transactions and prices, quantitatively mimicking seasonal fluctuations in UK and US markets.

Item Type: Article
Official URL:
Additional Information: © 2014 American Economic Association
Divisions: Economics
Subjects: H Social Sciences > HC Economic History and Conditions
JEL classification: C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C78 - Bargaining Theory; Matching Theory
R - Urban, Rural, and Regional Economics > R2 - Household Analysis > R21 - Housing Demand
R - Urban, Rural, and Regional Economics > R3 - Production Analysis and Firm Location > R31 - Housing Supply and Markets
Date Deposited: 22 Sep 2015 09:32
Last Modified: 20 Oct 2021 00:30
Projects: 240852
Funders: European Research Council, Bank of Spain, Suntory and Toyota International Centres for Economics and Related Disciplines, Fondation Banque de France

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