Anticipated vs. unanticipated house price movements and transaction volumeYavuz Arslan, Birol Kanık and Bülent Köksal Journal of Housing Economics, 2015, vol. 28, issue C, 121-129 Abstract: Using data from England and Wales, we analyze the relationship between house prices and transaction volume (number of houses sold) and find that there is a negative relationship. When we decompose price changes into anticipated and unanticipated components we find that while anticipated house price changes positively affect transaction volume, unanticipated price changes have a negative effect. These findings give insights for the theories which try to explain the relationship between house prices and transaction volume. Our findings are inconsistent with the “down-payment effect” approach developed by Stein (1995) and Ortalo-Magne and Rady (2006), and with the “loss aversion behavior” approach discussed by Genesove and Mayer (2001). However, our results support the evidence of asymmetric decisions on the buyer and seller side documented in Case and Shiller (1988) and partially support the mechanisms in search and matching models. Keywords: Expectations; Transaction volume; House prices (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jhouse:v:28:y:2015:i:c:p:121-129 DOI: 10.1016/j.jhe.2015.04.003 Access Statistics for this article Journal of Housing Economics is currently edited by H. O. Pollakowski More articles in Journal of Housing Economics from Elsevier |
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