Espen Moen, Plamen Nenov, Florian Sniekers, 15 February 2015

Search frictions are important for understanding the housing market volatility. This column shows not only that the optimal order of buying and selling depends on housing market conditions but that it also affects these conditions. This feedback leads to multiple equilibria and to fluctuations in transaction volume, average time on market, and house prices.

CEPR Policy Research