List Prices in the US Housing Market

30 Pages Posted: 13 Aug 2016 Last revised: 21 Jan 2017

See all articles by Darren K. Hayunga

Darren K. Hayunga

University of Georgia - Department of Insurance, Legal Studies, Real Estate

R. Kelley Pace

Louisiana State University - E.J. Ourso College of Business Administration

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Date Written: February 29, 2016

Abstract

A seller sets the list price based upon their ex-ante perception of the trade-off between marketing duration versus transaction price, which depends on the liquidity of the property and the depth of the market. As such, list prices reflect property, market, and seller characteristics. In addition, Genesove and Mayer (2001) and Bokhari and Geltner (2011) use prospect theory to motivate how expected nominal losses and gains from sale can also influence list prices. We consider these multiple factors affecting list prices through a rich dataset from the National Association of Realtors, which contains variables on seller motivations, structure liquidity, and other difficult to observe variables such as seller age, race, and income.

Keywords: List prices, Sellers’ motivations, Sellers’ characteristics, Loss aversion, Urgency, List price reductions

JEL Classification: R31

Suggested Citation

Hayunga, Darren K. and Pace, R. Kelley, List Prices in the US Housing Market (February 29, 2016). Journal of Real Estate Finance and Economics, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2821670

Darren K. Hayunga (Contact Author)

University of Georgia - Department of Insurance, Legal Studies, Real Estate ( email )

Athens, GA 30602-6254
United States
706-542-1365 (Phone)

R. Kelley Pace

Louisiana State University - E.J. Ourso College of Business Administration ( email )

Department of Finance
2164 B Patrick F. Taylor Hall
Baton Rouge, LA 70803-6308
United States
(225)-578-6256 (Phone)
(225)-578-9065 (Fax)

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