House Price Momentum and Strategic Complementarity
Bibliographic Data
| ID | 10177309 |
|---|---|
| Authors | Adam Guren (corresponding author), Adam M Guren |
| Year | 2018 |
| Volume | 126 |
| Issue | 3 |
| Pages | 1172-1218 |
| Publication date | 2018-01-29 |
| Peer Reviewed | Yes |
| Open Access | No |
| Type | ARTICLE |
| Venue | Journal of Political Economy (JOURNAL) |
| Journal identifiers | ISSN: 0022-3808 • E-ISSN: 1537-534X |
| Publisher | University of Chicago Press (PUBLISHER • US) |
| DOI | 10.1086/697207 |
| OpenAlex | W2414000966 |
| Language | EN |
| Citations received | 9 |
| References cited | 36 |
House prices exhibit substantially more momentum, positive autocorrelation in price changes, than existing theories can explain. I introduce an amplification mechanism to reconcile this discrepancy. Sellers do not set a unilaterally high or low list price because they face a concave demand curve: increasing the price of an above-average-priced house rapidly reduces its sale probability, but cutting the price of a below-average-priced house only slightly improves its sale probability. The resulting strategic complementarity amplifies frictions because sellers gradually adjust their price to stay near average. I provide empirical evidence for concave demand using a quantitative search model that amplifies momentum two- to threefold
Autocorrelation · Complementarity (molecular biology · Econometrics · Economics · Financial economics · Microeconomics · Momentum (technical analysis · Statistics · Consumer Market Behavior and Pricing · Economic and Environmental Valuation · Housing Market and Economics · Mathematics
Housing Prices and Credit Constraints in Competitive Search
Extrapolative households and strategic firms
Housing market congestion
Auctions and Negotiations in Housing Price Dynamics
Expectations with Endogenous Information Acquisition
A comparison of banks and real estate intermediaries as house sellers
Volatility in Home Sales and Prices
The Housing Boom and Bust
International Dimensions of Housing Markets
A model of investor sentiment1We are grateful to the NSF for financial support, and to Oliver Blanchard, Alon Brav, John Campbell (a referee), John Cochrane, Edward Glaeser, J.B. Heaton, Danny Kahneman, David Laibson, Owen Lamont, Drazen Prelec, Jay Ritter (a referee), Ken Singleton, Dick Thaler, an anonymous referee, and the editor, Bill Schwert, for comments.1
Coordinating Coordination Failures in Keynesian Models
Inflation dynamics
Prices and Trading Volume in the Housing Market
Loss Aversion and Seller Behavior
Natural Expectations and Macroeconomic Fluctuations
What is the role of the asking price for a house
Housing dynamics
A Theory of Liquidity in Residential Real Estate Markets
Search and matching in the housing market
Understanding Booms and Busts in Housing Markets
Aggregate Dynamics and Staggered Contracts
Vacancy, Search, and Prices in a Housing Market Matching Model
Real Rigidities and Nominal Price Changes
Individual Irrationality and Aggregate Outcomes
| Unique citing works | 9 |
|---|---|
| Citations per year | 1,5 |
| Citation span | 2020 - 2026 (7) |
| Citation velocity | current |
| Highly cited | No |
| Citation types | Neutral: 9 |