Bing Zhu’s research while affiliated with Technical University of Munich and other places

This study investigates whether flipping activities impose an externality on the transaction prices of the neighboring non‐flipped properties. Using a dataset of residential property transactions in Clark County, Nevada for the period 2003–2013, we find that flippers impose a significant positive impact on the price of neighboring non‐flipped properties in an up market, but a significant negative effect in a down market. This pro‐cyclical impact of flipping activity contributes to the volatility of housing prices, hence magnifying boom and bust cycles and increasing the likelihood of a mortgage crisis. This article is protected by copyright. All rights reserved