Local Experiences, Search, and Spillovers in the Housing Market

Abstract

Recent local price growth explains differences in search behavior across prospective homebuyers. Those experiencing higher growth in their postcode of residence search more broadly across locations and house characteristics, without changing attention devoted to individual sales listings, and have shorter search duration. Effects are stronger for homeowners, in particular those living in less wealthy areas and looking for a new primary residence. We use reduced‐form analysis and a quantitative equilibrium model to show that the expansion of search breadth translates into widespread spillovers onto house sales prices and inventories of listings across postcodes within a metropolitan area.

What drives the real estate market? Could behavioral indicators be useful in house pricing models?

“…The positive coefficient (0.003643) suggests that heightened local online interest corresponds with increased housing price returns, emphasizing the pivotal role of local sentiment and preferences in shaping housing market dynamics. This observation aligns with established theories linking local house price beliefs to housing search behavior (Ben-David, Fermand, Kuhnen, & Li, 2018;Gargano, Giacoletti, & Jarnecic, 2023;Piazzesi, Schneider, & Stroebel, 2020), emphasizing the impact of uncertainties regarding house price fluctuations on investment decisions (Ben-David et al, 2018). In line with previous studies by Anastasiou et al (2021) and Anastasiou and Kapopoulos (2023), our findings underscore the significance of local housing sentiment in influencing Greek housing prices.…”

Persistent trends and inefficiencies in the Greek housing market: a sentiment based approach

“…However, these studies rely on survey-based sentiment indexes to elucidate price variation and do not consider media-based information. Given that house price beliefs significantly influence the housing search process (Gargano et al, 2023;Piazzesi et al, 2020), and investment decisions are shaped by uncertainties regarding house price fluctuations (Ben- David et al, 2018), we contend that exploring media-based information and sentiment is crucial for a more comprehensive understanding of the Greek house price volatility.…”

“…However, these studies rely on survey-based sentiment indexes to elucidate price variation and do not consider media-based information. Given that house price beliefs significantly influence the housing search process (Gargano et al. , 2023; Piazzesi et al.…”

Goal Setting and Saving in the FinTech Era

“…FinTech encompasses a broad range of new technologies that seek to improve and automate the delivery and use of financial services (see Das (2019) for a review of the literature). A recent strand of the literature shows that FinTech can help households improve their trading performance and asset allocation (e.g., Gargano and Rossi (2018), D'Acunto, Prabhala, and Rossi (2019), Rossi and Utkus (2020), D'Acunto and Rossi (2021)), to reduce overspending (D'Acunto, Rossi, and Weber (2019)), to better conduct house searches (Gargano, Giacoletti, and Jarnecic (2023)) and to save on bank fees (D'Acunto et al. (2019), Carlin, Olafsson, and Pagel (2020), Loh and Choi (2020)).…”

“…2 See discussions on nudges and defaults (Madrian and Shea (2001), Thaler and Benartzi (2004), Thaler and Sunstein (2009), Brown and Previtero (2020), Medina and Pagel (2021)), reminders (Karlan et al (2016)), policy interventions (Gargano and Giacoletti (2022)), and robo-advising (D'Acunto, Prabhala, and Rossi (2019), Rossi and Utkus (2020)).…”