Job Market Paper: 

Reference Price Updating in the Housing Market [PDF] 

Abstract: What reference price do home sellers use when deciding on listing prices? This paper revisits this question using a model of seller listing behavior and a novel dataset that traces the transaction, refinancing, and listing history of over 97,000 U.S. residential properties. The structural model includes reference points, financial constraints, sale and mortgage default decisions, and matches key data moments. I find that sellers exhibit 2.5 higher degree of loss aversion to an observed "historical peak", measured by the appraised price of a refinance mortgage, compared to the original purchase price in a housing boom period. Model decomposition shows that using the historical peak as a reference price helps explain the observed listing premium and the correlation between aggregate house prices and volume to a greater extent, relative to the original purchase price. Collectively, these findings suggest that the historical peak during sellers' homeownership period serves as an updated and salient reference point influencing their pricing strategy, which, in turn, explains the aggregate dynamics of the housing market.

Working Papers:

Racial Disparity in Appraisals: Evidence from Private-Label Refinancing Mortgages [PDF] 

Abstract: Do minorities receive lower appraisals for similar housing compared to whites? I examine this question using a novel dataset that tracks the longitudinal refinancing history of residential properties from 2002 to 2007. The analysis applies a "repeat-refinances'' framework, analogous to the repeat sales method, to control for time-invariant unobserved housing quality. I find that appraisals received by black homeowners are 3.6% lower than those received by white owners, and the differences are not explained by variations in the owners' financial conditions or lender-specific factors. In addition, I benchmark the appraisal value to a market valuation predicted from a machine-learning model. The results indicate that appraisals are 24.9% more likely to be below the market values for black owned homes than for their white counterparts. These findings provide robust and consistent evidence for the ongoing discussion on racial discrimination in appraisals. Moreover, the findings have important implications for understanding the racial gaps in housing wealth accumulation.

Do Seller and Listing Agent Race Affect Property Listing Outcomes? 

Abstract:I study racial disparities in property listing outcomes using a detailed national dataset spanning from 1998 to 2022, covering both sold and unsold listings. I find that minorities are 5% - 6% less likely to sell comparable properties than white sellers when working with the same listing agent. These differences persist after accounting for unobserved housing quality and are stronger in wealthier and predominantly White neighborhoods. Critically, I also document that the lower probability of sale for minority sellers is not due to selling at a price premium. Additionally, I find that these disparities in the probability of a sale are substantially mitigated when minority sellers working with listing agents of the same racial background, particularly for Black and Asian sellers. Furthermore, I explore the impact of the entry of iBuyers on minority home sellers and find that iBuyers helps alleviate racial disparities in the probability of sale.

Can Stay-at-Home Orders Create a Pandemic Housing Boom? (with Alina Arefeva, Lu Han, Victor Ortalo-Marti)