This paper studies the pricing implications of financial uncertainty on housing markets. Out-of-sample tests show that the exposure to financial uncertainty predicts the cross-sectional variation in market returns. Housing markets with a more negative financial uncertainty beta imply higher...

Tests of the dividend pricing hypothesis (DPH) applied to housing have studied the trade-off between the capitalization rate (CAP rate) and subsequent house price appreciation. Even allowing for the fact that actual appreciation does not equal expected appreciation, evidence for the DPH is not...

In this paper, I quantify the effect of buyers' uncertainty about a home's quality on its pricing and liquidity. I first develop a parsimonious model of home sale in which buyers learn about the home's quality from a walkthrough and from the home's days-on-market. Quality uncertainty distorts...