NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Christopher Geissler

Duke University
Department of Economics
Box 90097
Durham, NC 27708

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NBER Working Papers and Publications

February 2011Speculators and Middlemen: The Strategy and Performance of Investors in the Housing Market
with Patrick Bayer, Kyle Mangum, James W. Roberts: w16784
Housing market transactions are a matter of public record and thus provide a rare opportunity to analyze the behavior, performance, and strategies of individual investors. Using data for all housing transactions in the Los Angeles area from 1988-2009, this paper provides empirical evidence on investor behavior that is consistent with several rationales for speculative investment in the finance literature, including the roles of middlemen and naïve speculators. Speculative activity by novice investors increased sharply in the recent housing boom. These investors earned little more than the market rate of appreciation and demonstrated no ability to foresee market price movements.
 
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