Speculators and Middlemen: The Strategy and Performance of Investors in the Housing Market

41 Pages Posted: 14 Feb 2011 Last revised: 13 May 2021

See all articles by Patrick J. Bayer

Patrick J. Bayer

Duke University - Department of Economics; National Bureau of Economic Research (NBER)

Christopher Geissler

Duke University

James W. Roberts

Duke University

Multiple version iconThere are 2 versions of this paper

Date Written: February 2011

Abstract

Housing market transactions are a matter of public record and thus provide a rare opportunity to analyze the behavior, performance, and strategies of individual investors. Using data for all housing transactions in the Los Angeles area from 1988-2009, this paper provides empirical evidence on investor behavior that is consistent with several rationales for speculative investment in the finance literature, including the roles of middlemen and naïve speculators. Speculative activity by novice investors increased sharply in the recent housing boom. These investors earned little more than the market rate of appreciation and demonstrated no ability to foresee market price movements.

Suggested Citation

Bayer, Patrick J. and Geissler, Christopher and Roberts, James W., Speculators and Middlemen: The Strategy and Performance of Investors in the Housing Market (February 2011). NBER Working Paper No. w16784, Available at SSRN: https://ssrn.com/abstract=1759856

Patrick J. Bayer (Contact Author)

Duke University - Department of Economics ( email )

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Christopher Geissler

Duke University ( email )

James W. Roberts

Duke University ( email )

100 Fuqua Drive
Durham, NC 27708-0204
United States

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