Segmented Housing Search

This paper studies housing markets with multiple segments searched by heterogeneous clienteles. We document market and search activity for the San Francisco Bay Area. Variation within narrow geographic areas is large and differs significantly from variation across those areas. In particular, search activity and inventory covary positively within cities and zip codes, but negatively across those units. A quantitative search model shows how the interaction of broad and narrow searchers drives housing market activity at different levels of aggregation and shapes the response to shocks as well as price discounts due to market frictions