We discuss the winner’s curse in housing markets—based on my joint work with Adam Nowak, Patrick Smith, and Alexei Tchistyi—plus what we’re seeing in today’s buyer’s market, housing affordability, and the implications of bidding wars. 

We unpacked what happens when buying a home requires a large overbid, a trend that has surged in Greater Rochester post-pandemic. Our findings show that while overbidding often “wins” the house, it can lead to adverse financial consequences for buyers.