Home Sales Pair Counts: The Organic Metric for Trading Volume in Housing Markets

Home sales pair counts are proposed as the organic metric for trading volume in housing markets. Aside from seasonality and temporal aggregation, as opposed to price appreciation, pair count growth is serially uncorrelated. A nonlinear dynamic GMM panel relating home price appreciation to adjusted count growth is estimated for respectively 5 condominium and 10 single-family home S&P/Case-Shiller indices. While both condominium and single-family home indices display a positive long-run response to shocks in trading volume, the latter is economically and statistically more pronounced. Overall, the empirical findings are consistent with the observation that housing markets are primarily quantity clearing markets.