The Informational Role of Housing Market Liquidity

53 Pages Posted: 5 Dec 2016 Last revised: 24 Apr 2018

See all articles by Cristian Badarinza

Cristian Badarinza

National University of Singapore (NUS)

Date Written: April 16, 2018


I propose a novel channel for the emergence of spatial correlation in housing market liquidity. Using micro-level panel data on both actual transactions and household valuations of their own non-traded properties, I find that market thinness and perceived house price growth rates are strongly linked across neighbouring areas, consistent with a framework in which spillovers arise through spatial learning. The mechanisms have the potential to explain the regional clustering of house prices, feedback effects, and the aggregate transmission of shocks from narrow segments of the market.

Keywords: Housing market, Liquidity, Learning

Suggested Citation

Badarinza, Cristian, The Informational Role of Housing Market Liquidity (April 16, 2018). Available at SSRN: or

Cristian Badarinza (Contact Author)

National University of Singapore (NUS) ( email )

1E Kent Ridge Road
NUHS Tower Block Level 7
Singapore, 119228

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