Rental Housing Markets, the Incidence and Duration of Vacancy, and the Natural Vacancy Rate

Gabriel, Stuart A.; Nothaft, Frank E.

doi:10.1006/juec.2000.2187

Cited by 84 publications

(72 citation statements)

References 11 publications

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“…For the next 4 years, 60% renters moved while 26% of owners moved illustrating that renters move at about twice the rate of owners. Gabriel and Nothaft (2001) study the duration of vacancies and the natural vacancy rate, primarily using BLS data collected for estimating the CPI. The rent and vacancy data, thus, represent a combination of multi and single family dwellings.…”

Section: Literature Reviewmentioning

confidence: 99%

Residential Asking Rents and Time on the Market

Allen

Rutherford

Thomson

2007

J Real Estate Finan Econ

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Landlords offering a house in the rental market face a difficult strategic pricing decision. The revenue maximizing decision for the landlord involves a tradeoff between the rental rate and time on the market. Because the turnover of renters is higher than owners, and because the landlord must bear some carrying costs on a vacant house, pricing the rent too high may decrease revenue due to a higher vacancy period and pricing it too low may reduce the revenue when occupied. While there is substantial research on the relationship between listed prices and time on the market for freehold interests, this is the first study to provide empirical evidence on the relationship between asking rent, contract rent and time on the market for single family residential rental (leasehold) property interests. We present two models; a rental price model and a duration model for time-on-the market. Using data from the Dallas–Fort Worth area we find that landlords who set a lower asking rent relative to predicted rent can expect a shorter marketing period for their properties. The results also indicate that overpricing the asking rent and then lowering it at a later date leads to a longer marketing time (after the reset) and often a lower rent. These finding are reasonably robust for low-, mid-, and higher-valued rental properties. Copyright Springer Science+Business Media, LLC 2009Time on market, Duration model, Hedonic model, Atypicality, Residential rent, Asking rent,

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Section: Literature Reviewmentioning

confidence: 99%

Residential Asking Rents and Time on the Market

Allen

Rutherford

Thomson

2007

J Real Estate Finan Econ

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“…Several empirically and model based studies illuminate this important point; confer e.g. with Igarashi (1991) and Gabriel and Nothaft (2001). In our framework, we extend this idea by allowing for the possibility of the second case, where rents evolve from a negotiation process and where the landlord considers employing various elements of price discrimination among possible tenants.…”

Section: Theoretical Frameworkmentioning

confidence: 99%

“…Recently, Gabriel and Nothaft (2001) used time-series data to assess the importance of vacancy indicators for the price adjustment mechanism. Our methodology is quite similarly motivated when we theorize that landlords use indicators of tenant type when they enter the price negotiation process.…”

Section: Introductionmentioning

confidence: 99%

The impact on rent from tenant and landlord characteristics and interaction

Larsen

Sommervoll

2009

Regional Science and Urban Economics

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Abstract:Owner-occupied housing services and rented housing services are often considered close substitutes, and both house price and rental price indices rely on regressions based on dwelling and location characteristics. However, while such characteristics are exhaustive in the owner's market, they cannot capture the additional complexity of rental markets. This paper offers a theoretical framework and an empirical analysis of additional factors that affect rent. The factors comprise three categories: Landlord characteristics, tenant characteristics, and characteristics of the landlord-tenant interaction. We analyze a novel data set sampled from the Norwegian rental market and obtain substantial improvements in explanatory power by including information on tenant and landlord characteristics and interaction. While variation in geographical variables explains 17 percent of the variation in monthly rent; variation in hedonic variables explain only 12 percent. Variation in tenant and landlord characteristics and interaction explains as much as 15 percent of rent variation. The full model captures 44 percent of rent variation and offers insights into the monetary values of landlord type, market mediation, tenure length, tenant type, and services. This additional explanatory power accentuates the difference between the owner's and renter's market, and the results come with ramifications for the general understanding of the rental market, for construction of rental indices, and for the assumption of a rental-equivalence principle in CPI-construction.

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“…There are some paper adopting survival or duration models in housing, mostly focusing on USA mortgage market (Vandell et al, 1993;2001;Ciochetti et al, 2003a,b;Lacour-Little and Malpezzi, 2003;Foote, Gerardi and Willen, 2008;Kau, Keenan and Li, 2011) or duration of rental vacancies in USA (Sternberg, 1994;Gabriel and Nothaft, 2001;Deng, Gabriel and Nothaft, 2003;Archer, Ling and Smith, 2010); moreover, the timing of land development in USA was also analysed (Cunningham, 2006). Papers outside USA include Bulan, Mayer andSomerville (2009) in Canada, Feijten andMulder (2010) in the Netherlands, and Ström (2010) Adopting a time framework to analyse survival models in housing, Vandell et al (1993) analyse individual commercial mortgage default with data from a major multi-line USA insurance company.…”

Section: Duration Models In Housing a Reviewmentioning

confidence: 99%

“…The conclusion in the paper is that duration is directly related to dwelling age, atypicality, the degree to which the neighbourhood is "run down," and the number of rental units in the building. Gabriel and Nothaft (2001) analyse the duration of rental vacancies in major USA metropolitan areas with ordinary least square regressions. Ciochetti et al (2003a) analyse the factors driving the borrower's decision to terminate commercial mortgage contracts with the lender through either prepayment or default.…”

Section: Duration Models In Housing a Reviewmentioning

confidence: 99%

Housing sales in urban Beijing

Barros¹,

Chen²,

Gil-Alana³

2011

Applied Economics

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In the housing market, new properties sometimes experience delays before they are sold. Such delays reflect the preferences of buyers in respect of the homes' characteristics. Therefore, it is important for managerial purposes to identify the causes of housing sales delays. After analyzing the delays in sales of housing in Beijing City, China, the principal finding of this study is that delays are largely explained by the dwellings' characteristics and location. Policy implications of the research findings, particularly those related to means of reducing the delays, are discussed. Carlos Pestana Barros

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Rental Housing Markets, the Incidence and Duration of Vacancy, and the Natural Vacancy Rate

Cited by 84 publications

References 11 publications

Residential Asking Rents and Time on the Market

Residential Asking Rents and Time on the Market

The impact on rent from tenant and landlord characteristics and interaction

Housing sales in urban Beijing

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