Asymmetric Information and List Price Reductions in the Housing Market

Wit, Erik R. de; Klaauw, Bas van der

doi:10.2139/ssrn.1589295

Cited by 7 publications

(3 citation statements)

References 22 publications

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“…Other attempts have been made to identify the factors that could influence the TOM through survival analysis and hazard models (Zuehlke 1987, Glower, Haurin and Hendershott 1998, McGreal et al 2009, de Wit and van der Klaauw 2013, Haurin et al 2013. However, as can be shown, the latter approach is equivalent to the approach based on the estimation of the linear model relating the log of TOM to a list of independent variables (Lee 1980, Haurin 1988).…”

Section: Discussionmentioning

confidence: 99%

A Spatiotemporal Solution for the Simultaneous Sale Price and Time‐on‐the‐Market Problem

Dubé

Legros

2015

Real Estate Economics

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There exists an important methodological challenge when dealing with sale price and time‐on‐the‐market variables because both variables are simultaneously determined and related to the motivation of the sellers and buyers. Exploiting the fact that transactions occur over space and time, we propose a two‐stage approach based on instrumental variables (IV) built from information collected from previous transactions. The unidirectional temporal property and the fact that other transactions are exogenous from the perspective of a single buyer or seller are exploited to evaluate the effect of the sale price on time‐on‐the‐market, and the effect of time‐on‐the‐market on the sale price. Based on 29,471 transactions occurring in the suburban neighborhood of Montréal (1992‐2000), the results suggest that, everything else being equal, houses staying longer on the market provide negative information to the market, which results in a lower final sale price, while the final sale price is negatively related to time‐on‐the‐market, indicating that houses of better quality (better amenities) stay less time on the market.

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Section: Discussionmentioning

confidence: 99%

A Spatiotemporal Solution for the Simultaneous Sale Price and Time‐on‐the‐Market Problem

Dubé

Legros

2015

Real Estate Economics

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“…I discuss reasons for these withdrawals in more detail in Section 8. 15 A related study that uses a similar data set from the Netherlands is De Wit and Van der Klaauw (2013). The authors find empirical evidence that list price changes affect selling outcomes such as the hazard rate of sale.…”

Section: Expectation Bias and Listmentioning

confidence: 99%

Information Frictions and Housing Market Dynamics

Anenberg

2012

FEDS

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Federal Reserve Board, U.S.A. I examine the effects of seller uncertainty over their home value on the housing market. Using evidence from home listings and transactions data, I first show that sellers do not have full information about current period demand conditions for their homes. I incorporate this type of uncertainty into a dynamic microsearch model of the home selling problem with Bayesian learning. The estimated model highlights how information frictions help to explain the microdecisions of sellers and how these microdecisions affect aggregate market dynamics. The model generates a significant microfounded momentum effect in short-run aggregate price appreciation rates. * Manuscript

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“…De Wit and Van der Klaauw () is one of the few papers in the literature that analyzes the effect of list price changes on time on the market.…”

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confidence: 99%

To Sell or Not to Sell: Measuring the Heat of the Housing Market

Carrillo

2013

Real Estate Economics

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Combining list-price, sale-price and time-on-the-market data, we estimate an index that summarizes housing market conditions and that has a direct economic interpretation. The index measures seller's bargaining power in a structural search model of home seller behavior. Structural estimation uncovers an analytical relationship between reduced form coefficients of hedonic and marketing-time equations and structural parameters. Thus, the index can be estimated using individual-level or aggregate data. Using housing transactions data from the Washington, D.C., area, we show that index trends coincide with the up and downturns in home appreciation rates and with popular perceptions about the "heat" of the market.

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Asymmetric Information and List Price Reductions in the Housing Market

Cited by 7 publications

References 22 publications

A Spatiotemporal Solution for the Simultaneous Sale Price and Time‐on‐the‐Market Problem

A Spatiotemporal Solution for the Simultaneous Sale Price and Time‐on‐the‐Market Problem

Information Frictions and Housing Market Dynamics

To Sell or Not to Sell: Measuring the Heat of the Housing Market

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