Information Precision and Market Stagnation in Japan’s Existing Housing Market

This study analyzes stagnation in Japan’s existing housing market using a dynamic equilibrium model with an information precision parameter (γ). The model distinguishes newer and older housing stocks and represents decisions under uncertainty through expected costs. Lower information precision raises expected costs, promoting early market exit of newer homes while suppressing sales, demolition, and conversion of older homes. It may also shift the nullclines and eliminate intersections within the feasible equilibrium region. Certification, housing inspections, and standardized disclosure may improve information precision and support market circulation.