The traditional mechanisms of private covenants and public restrictions may not meet the needs of... more The traditional mechanisms of private covenants and public restrictions may not meet the needs of residential property owners who want to preserve a certain neighborhood style. Privately initiated and publicly enforced conservation district regulations can preserve desirable neighborhood characteristics and signal to buyers that neighborhood conformity will likely persist. We analyze residential transaction prices in Dallas, Texas and find premiums
A seller sets the list price based upon their ex-ante perception of the trade-off between marketi... more 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. Upon deciding to sell their house, the owner faces the problem of setting the initial asking price. Sellers routinely set list prices higher than expected transaction prices to allow for negotiation with potential buyers. Additionally, sellers need to set higher list prices to obtain higher transaction prices. But owners cannot markup their list prices by too much or they risk materially delaying the sale, especially for more illiquid properties. Therefore, when setting their optimum list price, an owner must balance the potential marginal utility that can come from a higher price versus the marginal disutility of a longer time on market (TOM).
The traditional mechanisms of private covenants and public restrictions may not meet the needs of... more The traditional mechanisms of private covenants and public restrictions may not meet the needs of residential property owners who want to preserve a certain neighborhood style. Privately initiated and publicly enforced conservation district regulations can preserve desirable neighborhood characteristics and signal to buyers that neighborhood conformity will likely persist. We analyze residential transaction prices in Dallas, Texas and find premiums
A seller sets the list price based upon their ex-ante perception of the trade-off between marketi... more 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. Upon deciding to sell their house, the owner faces the problem of setting the initial asking price. Sellers routinely set list prices higher than expected transaction prices to allow for negotiation with potential buyers. Additionally, sellers need to set higher list prices to obtain higher transaction prices. But owners cannot markup their list prices by too much or they risk materially delaying the sale, especially for more illiquid properties. Therefore, when setting their optimum list price, an owner must balance the potential marginal utility that can come from a higher price versus the marginal disutility of a longer time on market (TOM).
Uploads