[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-152089-en":3,"doc-seo-152089-105":30,"detail-sidebar-cat-0-en-105":91},{"code":4,"msg":5,"data":6},0,"success",{"doc_id":7,"user_id":8,"nickname":9,"user_avatar":10,"doc_module":4,"category_id":11,"category_name":12,"doc_title":13,"doc_description":14,"doc_content":15,"file_id":16,"file_url":17,"file_type":18,"file_size":19,"view_count":4,"is_deleted":4,"is_public":20,"is_downloadable":20,"audit_status":20,"page_count":21,"language":22,"language_code":23,"site_id":24,"html_lang":23,"table_of_contents":25,"faqs":26,"seo_title":27,"seo_description":14,"update_tm":28,"read_time":29},152089,687207412472,"Angel","https://ap-avatar.wpscdn.com/davatar_155a257f0dc6eb9ab79c44ca47cae57d",8,"Research & Report","House Price Momentum and Strategic Complementarity","House prices show unusually strong momentum, with positive autocorrelation in price changes lasting about two to three years, which standard theories struggle to explain. The paper develops and tests an amplification mechanism: sellers avoid extreme list prices because they face a concave demand curve in relative price. This strategic complementarity amplifies adjustment frictions when sellers move prices gradually toward the market average, generating sluggish mean reversion.","House Price Momentum and Strategic Complementarity  \nAdam M. Guren⇤  \nBoston University  \nDecember 18, 2016 (Copy Edited April 15, 2018) First Version: November 10, 2013  \nAbstract  \nHouse prices exhibit substantially more momentum, positive autocorrelation in price changes over two to three years, than existing theories can explain. This paper introduces, empirically grounds, and quantitatively analyzes an amplification mechanism for momentum that can reconcile theory with the data. Sellers have an incentive not to set a unilaterally high or low list price because the demand curve they face is concave in relative price: increasing the list price of an above-averaged priced house rapidly reduces its probability of sale, while cutting the price of a below-average-priced home reduces revenue but only slightly improves its chance of selling. The resulting strategic complementarity amplifies frictions that generate sluggish price adjustment because sellers adjust their price gradually to stay near the average. I provide new micro-empirical evidence that the demand curve faced by sellers is concave and show using a search model calibrated to the micro evidence that concave demand amplifies momentum by a factor of two to three.  \n⇤ Email: [guren@bu.edu. This](guren@bu.edu. This) article is a revised version of the first chapter of my dissertation which was previously circulated under the title “The Causes and Consequences of House Price Momentum.” I would particularly like to thank my advisers John Campbell, Raj Chetty, Emmanuel Farhi, Edward Glaeser, Nathaniel Hendren, and Lawrence Katz for their support and guidance. The editor and four anonymous referees provided invaluable feedback. Gary Chamberlain, John Friedman, Simon Gilchrist, James Hamilton, Max Kasy, Jonathon Lecznar, Alisdair McKay, Jonathan Parker, Alp Simsek, Andrei Shleifer, Lawrence Summers, and Stephen Terry provided thoughtful discussionsand comments. Nikhil Agarwal, Rebecca Diamond, Will Diamond, Peter Ganong, Ben Hebert, Michal Kolesar, Tim McQuade, Pascal Noel, Mikkel Plagborg-Moller, Ben Schoefer, and seminar participants at the Booth School of Business, Boston University, Brown, Duke, the Federal Reserve Bank of Boston, the Federal Reserve Bank of New York, the Federal Reserve Board of Governors, the Haas School of Business, Kellogg School of Management, the NYU Search Theory Workshop, the Stern School of Business, UC Berkeley, and the Wharton School provided numerous discussions and suggestions. Andrew Cramond at DataQuick, Mike Simonsen at Altos Research, T.J. Doyle at the National Association of Realtors, and Mark Fleming, Sam Khater, and Kathryn Dobbyn at CoreLogic assisted mein understanding their data. Shelby Lin and Christopher Palmer provided assistance with the DataQuick data.  \n1 Introduction  \nA puzzling and prominent feature of housing markets is that aggregate price changes are highly positively autocorrelated (Case and Shiller, 1989) .1 This price momentum lasts for two to three years before prices mean revert, a time horizon far greater than most other asset markets. Substantial momentum is surprising both because most pricing frictions dissipate quickly and because predictable price changes should be arbitraged away by households, either by altering their bidding and bargaining or by re-timing their purchase or sale. Indeed, a literature that explains momentum by introducing frictions including search (Head et al. , 2014), Bayesian learning (Anenberg, 2014), extrapolative expectations (Case and Shiller, 1987; Glaeser and Nathanson, 2017), and the gradual spread of sentiment (Burnside et al., 2016) has been unable to quantitatively explain the degree of momentum in the data.  \nThis paper introduces, empirically grounds, and quantitatively analyzes an amplification mechanism for a broad class of underlying frictions that can reconcile existing theories with the data. Intuitively, no seller wants to set a list price that “sticks out” from comparable ho","cbCaijWNQiwpKGKZ","https://ap.wps.com/l/cbCaijWNQiwpKGKZ","pdf",974861,1,41,"English","en",105,"# Introduction\n## Momentum in housing markets\n## Amplification mechanism and intuition\n## Strategic complementarity and concave demand curve\n## Empirical approach using listing data","[{\"question\":\"What does the paper identify as the key puzzle in housing markets?\",\"answer\":\"Aggregate housing price changes display strong positive autocorrelation for two to three years before mean reversion, a horizon longer than most asset markets.\"},{\"question\":\"How does strategic complementarity amplify house price momentum?\",\"answer\":\"Because sellers face a demand curve concave in relative price, raising an above-average price sharply reduces sale probability and expected revenue, while lowering a below-average price improves sales only slightly, encouraging gradual price adjustment near the average.\"},{\"question\":\"What micro-empirical evidence does the paper provide?\",\"answer\":\"Using listing data from major California metros (2008–2013), it tests the sellers’ faced demand and finds evidence consistent with concavity; a calibrated search model shows concave demand can amplify momentum by a factor of two to three.\"}]","House Price Momentum and Strategic Complementarity | PDF",1787855162,103,{"code":4,"msg":31,"data":32},"ok",{"site_id":24,"language":23,"slug":33,"title":13,"keywords":34,"description":14,"schema_data":35,"social_meta":86,"head_meta":88,"extra_data":90,"updated_unix":28},"house-price-momentum-and-strategic-complementarity","",{"@graph":36,"@context":85},[37,54,68],{"@type":38,"itemListElement":39},"BreadcrumbList",[40,44,48,51],{"item":41,"name":42,"@type":43,"position":20},"https://docshare.wps.com","Home","ListItem",{"item":45,"name":46,"@type":43,"position":47},"https://docshare.wps.com/document/","Document",2,{"item":49,"name":12,"@type":43,"position":50},"https://docshare.wps.com/document/research-report/",3,{"item":52,"name":13,"@type":43,"position":53},"https://docshare.wps.com/document/house-price-momentum-and-strategic-complementarity/152089/",4,{"url":52,"name":13,"@type":55,"author":56,"headline":13,"publisher":58,"fileFormat":61,"inLanguage":23,"description":14,"dateModified":62,"datePublished":62,"encodingFormat":61,"isAccessibleForFree":63,"interactionStatistic":64},"DigitalDocument",{"name":9,"@type":57},"Person",{"url":41,"name":59,"@type":60},"DocShare","Organization","application/pdf","2026-08-27",true,{"@type":65,"interactionType":66,"userInteractionCount":4},"InteractionCounter",{"@type":67},"ViewAction",{"@type":69,"mainEntity":70},"FAQPage",[71,77,81],{"name":72,"@type":73,"acceptedAnswer":74},"What does the paper identify as the key puzzle in housing markets?","Question",{"text":75,"@type":76},"Aggregate housing price changes display strong positive autocorrelation for two to three years before mean reversion, a horizon longer than most asset markets.","Answer",{"name":78,"@type":73,"acceptedAnswer":79},"How does strategic complementarity amplify house price momentum?",{"text":80,"@type":76},"Because sellers face a demand curve concave in relative price, raising an above-average price sharply reduces sale probability and expected revenue, while lowering a below-average price improves sales only slightly, encouraging gradual price adjustment near the average.",{"name":82,"@type":73,"acceptedAnswer":83},"What micro-empirical evidence does the paper provide?",{"text":84,"@type":76},"Using listing data from major California metros (2008–2013), it tests the sellers’ faced demand and finds evidence consistent with concavity; 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