The Short and the Long of It: Stock-Flow Matching in the US Housing Market

Abstract

From 2006 until 2020, the probability of selling a house in the U.S. declined sharply after listing for 2 weeks. Moreover, sales within the first 2 weeks of listing (“quick sales”) and sales happening afterward (“slow sales”) behaved differently over the housing cycle. The probability and associated price of a quick sale recovered from the slump sooner, faster, and more prominently than a slow sale. This paper demonstrates that a calibrated stock-flow matching model not only generates quantitatively consistent sales, prices, listings, and time on the market but also captures distinctions between fast and slow sales over the housing cycle.