A Study on Sellers’ Anchoring Psychology and Downward Rigidity of Apartment Prices

This study empirically analyzes the impact of localized demand-suppression policies and macroeconomic shocks on downward price rigidity and transaction structure in the Seoul apartment market. To overcome the limitations of conventional macro-panel models, we use transaction microdata to dynamically estimate changes in price distributions and sellers’ anchoring effects. The results indicate that stringent regulations intended to curb price surges intensify sellers’ anchoring tendencies, leading them to retain previous peak prices. These cognitive frictions sharply contract trading volumes and induce market segmentation, concentrating transactions among high-end assets. Furthermore, two-way fixed-effects and counterfactual simulations reveal a dual mechanism of downward rigidity: a “finance-based rigidity” in the mid-to-low-tier market, which is highly responsive to interest rates; and a “psychology-based rigidity (hysteresis)” in the top-tier market, where sellers strongly defend reference prices even during deregulation. In conclusion, macroeconomic shocks alone cannot account for the housing market’s transaction cliff and downward price rigidity; policy-triggered behavioral shifts are equally important. This finding confirms that price adjustments are governed by the interplay between financial constraints and behavioral factors, suggesting that policymakers must consider changes in transaction functions and market structures when evaluating stabilization policies.