Hot and Cold Seasons in the Housing Market
By L. Rachel Ngai and Silvana Tenreyro
"Every year housing markets in the United Kingdom and the United
States experience systematic above-trend increases in prices and
transactions during the spring and summer (“hot season”) and
below-trend falls during the autumn and winter (“cold season”).
House price seasonality poses a challenge to existing housing models.
We propose a search-and-matching model with thick-market effects.
In thick markets, the quality of matches increases, rising buyers’ willingness
to pay and sellers’ desire to transact. "