This paper derives necessary and sufficient conditions for the existence and occurrence likelihood
of competitive equilibria in urban land and housing markets: (i) when there is imperfect information
causing costly search trips and (ii) when land and housing are differentiated according to betweenzone
and within-zone heterogeneity. Such competitive equilibria are contingent on the possibility that
consumers spill over into the markets of less preferred zones. The main conclusions are that markets
tend to be partitioned into homogeneous sub-groups and when they do not, heterogeneity may
hamper the effectiveness of search and hence work against the existence of competitive equilibria