Local Experiences, Search and Spillovers in the Housing Market

91 Pages Posted: 7 Feb 2020 Last revised: 22 Jul 2021

See all articles by Antonio Gargano

Antonio Gargano

University of Houston - C.T. Bauer College of Business

Marco Giacoletti

Marshall School of Business

Elvis Jarnecic

The University of Sydney; Financial Research Network (FIRN)

Date Written: January 13, 2020

Abstract

Recent local price growth explains differences in search behavior across prospective homebuyers. Those experiencing higher growth in their postcode of residence search more broadly across locations and house characteristics, without changing attention devoted to individual sales listings, and have shorter search duration. Effects are stronger for homeowners, in particular those living in less wealthy areas and looking for a new primary residence. We use a quantitative equilibrium model and reduced-form analysis to show that the expansion of search breadth translates into widespread spillovers onto house sales prices and inventories of listings across postcodes within a metropolitan area.

Keywords: Local Experiences, Search Behavior, Attention, Extrapolative Expectations, Collateral Constraints, House Prices

JEL Classification: D10, E32, G40, R31

Suggested Citation

Gargano, Antonio and Giacoletti, Marco and Jarnecic, Elvis, Local Experiences, Search and Spillovers in the Housing Market (January 13, 2020). Available at SSRN: https://ssrn.com/abstract=3519635 or http://dx.doi.org/10.2139/ssrn.3519635

Antonio Gargano

University of Houston - C.T. Bauer College of Business ( email )

Houston, TX 77204-6021
United States

Marco Giacoletti (Contact Author)

Marshall School of Business ( email )

701 Exposition Blvd
Los Angeles, CA California 90089
United States

Elvis Jarnecic

The University of Sydney ( email )

University of Sydney
Sydney, NSW 2006
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

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