Regional Housing Market Conditions in Spain

Alessandro Galesi, Nuria Mata, David Rey, Sebastian Schmitz, Johannes Schuffels

Research output: Working paper / PreprintWorking paper

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Selling homes is not easy. Home sellers usually need to apply a price discount to swiftly close a deal, and more so when housing market activity is low. Using detailed data on home listings and transactions in Spain, we provide unique estimates of the price discount across regional submarkets and time. We document
that the price discount is strongly countercylical, as it increases with declining market conditions, and viceversa during upturns. Despite substantial heterogeneity, regional price discounts are synchronized and a single common factor can account for about sixty percent of their variation, thus suggesting the existence of a national housing cycle. Finally, we document that the main factors linked to changes in the price discount are developments in income, population, and interest rates, which are jointly able to explain the bulk of variation in housing market liquidity across
regions and time. Besides providing a formal test of the performance of the price spread in gauging housing market liquidity, this study conveys practical information to real estate market participants, policymakers, and financial institutions for which assessing conditions in Spanish housing markets is a central task.
Original languageEnglish
PublisherMaastricht University, Graduate School of Business and Economics
Number of pages29
Publication statusPublished - 29 Oct 2020

Publication series

SeriesGSBE Research Memoranda

JEL classifications

  • r20 - Urban, Rural, Regional, Real Estate, and Transportation Economics: Household Analysis: General
  • r30 - Real Estate Markets, Production Analysis, and Firm Location: General
  • r32 - Other Production and Pricing Analysis


  • housing market
  • asking price
  • price discount
  • market tightness


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