Articlegold2009

Momentum Traders in the Housing Market: Survey Evidence and a Search Model

478 citations0/0 files storedAmerican Economic Review

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Housing Market and Economics Financial Markets and Investment Strategies Economic theories and models

Abstract

This paper studies household beliefs during the recent US housing boom.To characterize the heterogeneity in households' views about housing and the economy, we perform a cluster analysis on survey responses at different stages of the boom.The estimation always finds a small cluster of households who believe it is a good time to buy a house because house prices will rise further.The size of this "momentum" cluster doubled towards the end of the boom.We also provide a simple search model of the housing market to show how a small number of optimistic investors can have a large effect on prices without buying a large share of the housing stock.

Citations in this library

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References

1977RISK, UNCERTAINTY, AND DIVERGENCE OF OPINION 1990Vacancy, Search, and Prices in a Housing Market Matching Model 2010Natural Expectations and Macroeconomic Fluctuations

Cited by

2011How to Deal with Real Estate Booms: Lessons from Country Experiences 2016Understanding Booms and Busts in Housing Markets 2018Home Price Expectations and Behaviour: Evidence from a Randomized Information Experiment 2017An extrapolative model of house price dynamics 2015The Housing Market (s) of San Diego 2017Housing Market Responses to Transaction Taxes: Evidence From Notches and Stimulus in the U.K.2014Hot and Cold Seasons in the Housing Market 2014Search, Liquidity, and the Dynamics of House Prices and Construction

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