Theoretical Causes for Vacancies in the Housing Market

There are different causes for vacancies in the housing market. The scientific literature provides a series of approaches which may explain the interrelations eventually leading to vacancies. In this paper, the fundamental causes for vacancies are presented under the assumptions of the standard market model, the search and matching theory and behavioral economics. Concerning the latter, a new theoretical framework is used in order to explain vacancies in the housing market in the context of the prospect theory. From these theories different hypotheses are derived to explain under which circumstances vacancies arise. Afterwards, the validity of the generated hypotheses is evaluated with the help of existing empirical literature. Most of the hypotheses withstand the empirical examination.Only in some cases results are not consistent with one another or contradict the theoretical predictions.