MACRO: Can Stay-at-Home Orders Create a Pandemic Housing Boom?; Professor Victor Ortego-Marti (University of California, Riverside)

We study the policy interventions in the form of stay-at-home orders from March to April 2020 that prevented in-person viewings, inspections, and closed businesses supporting the home search. This provides a natural experimental setting to test the dynamic housing market responses to a temporary disruptions to home search activities. We show that sales prices increased while the sale hazard, the number of sales, and listings dropped. These effects are stronger for market segments with lower Internet penetration and older neighborhoods. The effects are similar when the stay-at-home orders end. These findings are consistent with a random matching model where stay-at-home orders reduced search efficiency, suggesting that the stay-at-home orders interact with search frictions when affecting housing market outcomes.

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