This paper develops a matching model à la Pissarides (2000) in order to explain the basic facts of housing markets, most of all the variance in house prices. Price dispersion is basically due to both the ex-ante heterogeneity of the parties and the search costs of buyers and sellers. In fact,...

In this paper, we build the rationale of the financial intermediate's decision of making loans to potential home buyers over an infinite time horizon. In the first period "good" borrowers with stable future income flows receive loans and buy homes. In later periods, the intermediate securitizes...

The residential property industry, which had grown rapidly in the 1980s, however, encountered overhang problems recently. Overhang of residential units has been getting worse and therefore, precautionary measures must be taken by the housing developers before it leads to a property glut. In...

The Rosen-Roback spatial equilibrium theory states that cross-city variations in wages and housing prices reflect urban residents’ willingness to pay for urban amenities or quality of life. This paper is the first to quantify and rank the quality of life in Chinese cities based on the...

This paper examines whether the Mortensen-Pissarides matching model can account for the housing market facts, most of all the empirical anomaly known as ‘price dispersion’. Our main finding is that the model can account for the three basic facts of housing market (namely, the existence of...

This paper examines whether the baseline Mortensen-Pissarides matching model can account for the housing market facts, namely, the existence of price dispersion, the positive correlation between housing price and trading volume, and between housing price and time-on-the-market. Our main finding...

There are two types of home seekers in this housing market matching model: the homeless who search for a dwelling both in the rental market and in the homeownership market simultaneously; and the home seekers in the renter (tenant) state who want to buy a home and only search in the...

The key issue in the hedonic price theory is that although the literature emphasises the intrinsic nonlinearity in the relationship between house prices and housing characteristics, very little theoretical guidance is provided regarding the more appropriate mathematical specification for the...

A model of the term structure of lease rates in a frictionless economy is developed and its predictions are compared with data on residential leases in Japan. The model shows that the initial lease rate for a cancellable lease must be set higher than that for a non-cancellable lease because the...

This paper examines real estate pricing featuring the price response curve, both theoretically and empirically. The Bertrand model with differentiated products suggests that the price response of real estate may differ when properties in the vicinity are priced by an affiliated firm or one's own...