Abstract

Buying a house is a highly subjective decision which can be easily affected by investors’ mood. This paper studies the weather-based indicators of mood impact on the negotiation between buyers and sellers. Motivated by previous studies, I use cloud cover as the proxy for mood. Utilizing weather housing transaction data in Montreal from 2013 October to 2017 December, I find that high cloud cover will increase the difference between listing price and transaction price. Furthermore, it will prolong the days a transaction takes. Besides, this study finds a nonlinear relationship between cloud cover and transaction price, cloud cover and transaction period, and cloud cover and price difference between listing and transaction. At last, this study finds a weak connection between cloud cover and whether sellers decrease their listing price.