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Housing prices and credit constraints in competitive search

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dc.affiliation.dptoUC3M. Departamento de Economíaes
dc.contributor.authorDiaz Rodriguez, Antonia
dc.contributor.authorJerez Garcia-Vaquero, Maria Belen
dc.contributor.authorRincón-Zapatero, Juan Pablo
dc.contributor.editorUniversidad Carlos III de Madrid. Departamento de Economíaes
dc.date.accessioned2020-06-19T16:29:54Z
dc.date.available2020-06-19T16:29:54Z
dc.date.issued2020-06-19
dc.description.abstractWe embed a competitive search model of the real estate market into a heterogeneous agentsetting where hoeholds face credit constraints and idiosyncratic turnover shocks. Householdscan accumulate a risk-free asset to build a down payment and to smooth non-housing consumption.There is an inelastic supply of identical homes. The model is "block recursive". Inequilibrium wealthier home buyers sort into submarkets with higher prices and shorter buyingtimes. We identify a novel amplification mechanism, arising from sorting, by which demandshocks can substantially affect housing prices. In particular, lowering down payment requirementsinduces entry of new buyers in the market and higher asset accumulation by currentsearchers, as these agents target more expensive (less congested) submarkets. This affects thedistribution of prices and trading probabilities, and thereby the wealth distribution. Our quantitativeresults suggest that the effects on the long-run level and dispersion of housing pricescan be significant.en
dc.description.sponsorshipSupport from the Spanish Ministerio Economía y Competitividad, grants ECO2016-76818-C3-1-P and ECO2017-86261-P, MDM 2014-0431, and Comunidad de Madrid, MadEco-CM (S2015/HUM-3444), is gratefully acknowledged.en
dc.identifier.issn2340-5031es
dc.identifier.urihttps://hdl.handle.net/10016/30623
dc.identifier.uxxiDT/0000001765es
dc.language.isoenges
dc.relation.ispartofseriesWorking paper. Economicsen
dc.relation.ispartofseries20-07
dc.relation.projectIDComunidad de Madrid. S2015/HUM-3444es
dc.relation.projectIDGobierno de España. ECO2016-76818-C3-1-Pes
dc.relation.projectIDGobierno de España. ECO2017-86261-Pes
dc.relation.projectIDGobierno de España. MDM 2014-0431es
dc.rightsAtribución-NoComercial-SinDerivadas 3.0 España*
dc.rights.urihttp://creativecommons.org/licenses/by-nc-nd/3.0/es/*
dc.subject.jelD31
dc.subject.jelD83
dc.subject.jelE21
dc.subject.jelR21
dc.subject.jelR30
dc.subject.otherHousing Pricesen
dc.subject.otherCredit Constraintsen
dc.subject.otherCompetitive Searchen
dc.subject.otherPrice Dispersionen
dc.subject.otherInelastic Housing Supplyen
dc.subject.otherWealth Inequalityen
dc.subject.otherSortingen
dc.titleHousing prices and credit constraints in competitive searchen
dc.typeworking paper*
dspace.entity.typePublication
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