As a postscript: you might say, well, why do I care about liquidity? One neat empirical fact that we show is that for normal listings (non-REO, non-foreclosure), the probability of *subsequent* foreclosure (in the next two years) is highly correlated with agent experience.

Why? Well the homes that list and sell don't go into foreclosure. But those that do not sell are highly likely to go into foreclosure during the crisis. Since experience has large effects on the probability of listing sale, it's natural that this maps across!