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Seller-Paid Concessions from 2004-2012: Implications for House Selling Price and Days on the Market

Author

Listed:
  • Daniel T. Winkler

    (University of North Carolina at Greensboro)

  • Bruce L. Gordon

    (University of North Alabama)

Abstract

Previous research has examined the extent to which seller-paid concessions (SPCs) are capitalized in house selling prices. Most of these studies are limited to regular, non-foreclosed property sales and non-distressed time periods. This study examines foreclosed and non-foreclosed housing selling prices and DOM from Q1:2004-Q1:2012, the years surrounding the 2008-09 housing debacle. The findings suggest that SPCs are fully capitalized into the net selling price of non-foreclosed properties but a 6.7% - 15.0% price premium occurs for foreclosed property prices. In addition, non-foreclosed transactions with SPCs have up to 19.5% longer days on the market (DOM) during this time period. The effect of SPCs on price and DOM vary before and after the housing debacle. This finding supports a growing literature indicating that abrupt changes in economic conditions influence price premiums and discounts through adjustments in magnitude of the underlying explanatory variables.

Suggested Citation

  • Daniel T. Winkler & Bruce L. Gordon, 2015. "Seller-Paid Concessions from 2004-2012: Implications for House Selling Price and Days on the Market," Journal of Real Estate Research, American Real Estate Society, vol. 37(4), pages 537-562.
    • Handle: RePEc:jre:issued:v:37:n:4:2015:p:537-562
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    Cited by:

    1. Bruce L. Gordon & Michael J. Seiler & Ralph Siebert & Daniel T. Winkler, 2022. "Do Real Estate Contingency Clauses Affect Selling Price and Time-on-the-Market?," CESifo Working Paper Series 9947, CESifo.
    2. Darren K. Hayunga, 2018. "Sales Concessions in the US Housing Market," The Journal of Real Estate Finance and Economics, Springer, vol. 56(1), pages 33-75, January.

    More about this item

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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