Motivated sellers and predation in the housing market

Selcuk, Cemil

doi:10.1016/j.econmod.2013.02.005

Cited by 8 publications

(6 citation statements)

References 21 publications

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“…Another important gauge of the state of market is the liquidity, generally being reflected by the probability of sale (Krainer, 2001;Krainer & LeRoy, 2002;Selcuk, 2013;Fisher, Gatzlaff, Geltner, & Haurin, 2003). It has been recognized that the liquidity has endogenous relationship with transaction price (Fisher et al, 2003;Fisher, Geltner, & Pollakowski, 2007).…”

Section: Introductionmentioning

confidence: 99%

An Improved Approach for Constructing the Real Estate Price Index with Bargaining Effect

Zhang¹,

Gu²

2020

IJEF

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Bargaining game is ubiquitous in real estate markets due to its heterogeneity. Price index, the most important measurement the market condition, constructed with current approaches however cannot consider the effect of bargaining. Therefore, in this work, we provide a construction of price index including sellers’ bargaining power based on Nash bargaining theory and Heckman’s two-step regression. The sellers’ bargaining power is estimated from the aggregate data of list-price, sale-price and time-on-the-market. Using this method, the residential price index of an empirical example was conducted. The results are in reasonable agreement with the realistic situations, verifying the feasibility and applicability of the developed method.

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Section: Introductionmentioning

confidence: 99%

An Improved Approach for Constructing the Real Estate Price Index with Bargaining Effect

Zhang¹,

Gu²

2020

IJEF

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“…A recent body of theoretical work 3 See Duffie et al (2005), Lagos and Rocheteau (2009), Rocheteau and Weill (2011), Vayanos and Wang (2007) among others. 4 Albrecht et al (2007) and Selcuk (2013) provide models on the housing market that have related notions of distressed sellers. The model in Albrecht et al (2007) produces various equilibrium matching patterns including opportunistic matching where regular searchers wait to meet with desperate searchers only.…”

Section: Introductionmentioning

confidence: 99%

“…The model in Albrecht et al (2007) produces various equilibrium matching patterns including opportunistic matching where regular searchers wait to meet with desperate searchers only. The setup in Selcuk (2013) is open loop in that trading agents leave the market and are replaced by clones, whereas ours, similar to the aforementioned papers in the OTC literature, has a closed loop setting where sellers become buyers, buyers become owners and owners become sellers again. explores various mechanisms through which predatory trading takes place e.g.…”

Section: Introductionmentioning

confidence: 99%

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Distressed Sales in OTC Markets

Selcuk

2016

The Manchester School

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We present a stylized model of the over-the-counter markets in the tradition of Duffie et al. (2005) with two distinctive features: (i) buyers have heterogenous preferences and their willingness to pay is private information and (ii) sellers become financially distressed if they cannot sell for too long. A unique steady-state equilibrium exists and it is characterized by predatory buying. Specifically, during periods where sellers are more likely to become distressed (e.g. during economic crises, financial turmoils, etc.) buyers become more selective and hold off purchasing despite the abundance of distressed sales and low prices. This reluctance triggers the number of distressed sellers to grow even further and forces them for additional price cuts.

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“…4 Impatient (motivated) sellers are considered important determinants of initial list prices and subsequent changes in list prices. Among the numerous examples arranged according to their publication dates are Anglin (2004), Herrin et al (2004), de Wit and van der Klaauw (2013), Selcuk (2013), Liu and van der Vlist (2019), Seo et al (2020), and Shen and Ross (2021).…”

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confidence: 99%

Signaling effects of recurrent list‐price reductions on the likelihood of house sales

Kryzanowski

2022

J of Financial Research

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Recurrent list‐price reductions for a house may signal the impatience of sellers to conclude a sell transaction more quickly, leading to more visits and a higher likelihood of being sold (positive signal). Recurrent list‐price reductions may also provide a market signal that the listing is problematic and thus harder to sell without a list‐price reduction, leading to a lower likelihood of being sold (negative signal). Unlike standard survival analysis, we investigate which signal prevails using a joint frailty model that accounts for the interdependence among recurrent list‐price reductions and the association between the recurrent reductions and the sold event. Our novel data set contains the time‐dated recurrent list‐price reductions for each house listed on the market. The results from the joint frailty model show time‐varying negative impacts of list‐price reductions on the likelihood of a house sale, supporting the dominance of the negative signaling effects of recurrent list‐price reductions. Although listings with frequent list‐price reductions are less likely to be sold, sold houses sell at a higher ratio of sold price to last list price, which incorporates current market conditions and fairer pricing, holding constant the initial list price and the aggregate list‐price reduction from the initial list price.

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Motivated sellers and predation in the housing market

Cited by 8 publications

References 21 publications

An Improved Approach for Constructing the Real Estate Price Index with Bargaining Effect

An Improved Approach for Constructing the Real Estate Price Index with Bargaining Effect

Distressed Sales in OTC Markets

Signaling effects of recurrent list‐price reductions on the likelihood of house sales

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