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Evaluating Different Housing Prices: Marketing and Financial Distortions

Author

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  • Josep Maria Raya

    (Tecnocampus, Universitat Pompeu Fabra)

Abstract

The aim of this paper is to evaluate the importance of housing price. We compare the evolution of three different types of housing prices (list, sale and appraisal prices). The objective is to see the marketing and financial consequences of using each type of housing price. To do this, a dataset of a real estate company and its financial intermediary with all of these types of housing prices is used. We estimate econometric models in which the dependent variables are: price (appraisal, selling or list), mark-up, loan to value and foreclosures. The results show evidence of the consequences of using a specific housing price in terms of inflation calculation, financial assets, and collateral valuation and mortgage default, among others.

Suggested Citation

  • Josep Maria Raya, 2021. "Evaluating Different Housing Prices: Marketing and Financial Distortions," International Real Estate Review, Global Social Science Institute, vol. 24(4), pages 549-576.
    • Handle: RePEc:ire:issued:v:24:n:04:2021:p:549-576
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    More about this item

    Keywords

    housing prices; appraisal prices; selling prices; markup; default; left-digit bias; inflation; overappraisal; evaluation.;
    All these keywords.

    JEL classification:

    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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