The so-called four quadrant model (DiPasquale & Wheaton, 1992) is probably the most studied model of long-run equilibrium in aggregate housing markets. The modified version of the model proposed by Colwell (2002) also studies the short-run adjustments process that led from one long-run equilibrium to another. However, the introduction of the demand for vacant units by landlords makes the model much more complicated, without offering significant improvements. Since the analysis of vacant houses is closely related to the time involved in filling vacant units, this chapter introduces the vacancy dynamics in the DiPasquale–Wheaton–Colwell model. Furthermore, by using the concept of time-on-the-market, an endogenous capitalization rate can be obtained in a straightforward way.