Krainer, John; Spiegel, Mark M.; Yamori, Nobuyoshi - In: Real Estate Economics 38 (2010) 2, pp. 171-196
We develop an overlapping generations model of the real estate market in which search frictions and a debt overhang combine to generate price persistence and illiquidity. Illiquidity stems from heterogeneity in agent real estate valuations. The variance of agent valuations determines how quickly...