Vacancy chains and the degree of mobility in the housing market

摘要

Mobility among different states of the housing market (e.g., among tenure modes and price classes) not only generates liquidity but also carries a crucial effect on the price pattern in the market. Studying housing mobility may thus provide insights to the current developments in worldwide housing markets. We theoretically explore vacancy chains and mobility in the market where, among the various results, we show that, in comparing markets with different degrees of mobility, when the probability to transit from any given state to lower states is zero, the expected number of intra-state transitions (as opposed to inter-state transitions) is always smaller in the market that allows for the greater mobility. Also, we derive upper and lower bounds for the expected number of intra-state transitions in the market and specifically show that the "multiplier effect" of the vacancy chain represents a lower bound for this measure. Among the other results, we show that, for every given housing state i, the expected number of intra-state vacancy transitions is greater than the expected number of interstate transitions for all states j ^ i. Moreover, we find a condition under which we characterize a subgroup of markets whose expected number of intra-state transitions is greater than the expected number of inter-state transitions for each vacancy chain. Our analysis of mobility and vacancy chains, while specifically focusing on housing markets, may be generalized to other markets as well.