Working Paper: NBER ID: w20823
Authors: Monika Piazzesi; Martin Schneider; Johannes Stroebel
Abstract: We study housing markets with multiple segments searched by heterogeneous clienteles. In the San Francisco Bay Area, search activity and inventory covary negatively across cities, but positively across market segments within cities. A quantitative search model shows how the endogenous flow of broad searchers to high-inventory segments within their search ranges induces a positive relationship between inventory and search activity across segments with a large common clientele. The prevalence of broad searchers also shapes the response of housing markets to localized supply and demand shocks. Broad searchers help spread such shocks across many segments and thereby reduce their effect on local market activity.
Keywords: housing markets; search behavior; inventory; market segments; clientele patterns
JEL Codes: E00; G12; R30
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| endogenous flow of broad searchers (O36) | positive correlation between inventory and search activity (L81) |
| inventory increases (D25) | number of broad searchers attracted increases (J68) |
| broad searchers mitigate impact of localized supply and demand shocks (F61) | lower negative effects on local market activity (F69) |
| broad searchers in high-inventory segments (L81) | increases total number of searchers per house (R20) |