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Heterogeneous Real Estate Agents and the Housing Cycle

Author

Listed:
  • Sonia Gilbukh
  • Paul Goldsmith-Pinkham

Abstract

The real estate market is highly intermediated, with 90% of buyers and sellers hiring an agent. However, low barriers to entry and fixed commission rates result in large market share for inexperienced intermediaries. Using micro-level data on 8.5 million listings and a novel research design, we show that house listings by inexperienced agents have a lower probability of selling, and this effect is strongest during the housing bust. We estimate that 3.7% more listings would have been sold in a flexible commission equilibrium. Eighty percent of this improvement comes from competition and the remainder from commission variation across experience.

Suggested Citation

  • Sonia Gilbukh & Paul Goldsmith-Pinkham, 2024. "Heterogeneous Real Estate Agents and the Housing Cycle," The Review of Financial Studies, Society for Financial Studies, vol. 37(11), pages 3431-3489.
    • Handle: RePEc:oup:rfinst:v:37:y:2024:i:11:p:3431-3489.
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    File URL: http://hdl.handle.net/10.1093/rfs/hhae048
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    More about this item

    Keywords

    G5; R3;

    JEL classification:

    • G5 - Financial Economics - - Household Finance
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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