Price Adjustment and Liquidity in a Residential Real Estate Market with an Accelerated Information Cascade

Authors

Sean P. Salter, Middle Tennessee State UniversityFollow
Ernest W. King, University of Southern MississippiFollow

Document Type

Article

Publication Date

10-1-2009

Department

Finance, Real Estate, and Business Law

Abstract

We examine the effect of an unannounced information event, Hurricane Katrina, on the liquidity of the residential real estate market in an area proximately located to the Mississippi Gulf Coast. Using 2SLS and Weibull techniques applied to a unique MLS data set, we test changes in liquidity in a submarkets framework. Results suggest Katrina created submarket effects with respect to the listing and sales periods of our sample and market liquidity was directly influenced by this event. We suggest that this effect was tied to information flow as owners of heavily damaged properties sought new housing in a nearby area.

Publication Title

Journal of Real Estate Research

Volume

31

Issue

4

First Page

421

Last Page

454

Recommended Citation

Salter, S. P., King, E. W. (2009). Price Adjustment and Liquidity in a Residential Real Estate Market with an Accelerated Information Cascade. Journal of Real Estate Research, 31(4), 421-454.
Available at: https://aquila.usm.edu/fac_pubs/1256