IDEAS home Printed from https://ideas.repec.org/p/arz/wpaper/eres2011_68.html
   My bibliography  Save this paper

Factors that influence listing prices and selling prices of owner-occupied residential properties in Germany

Author

Listed:
  • Michael Dinkel

Abstract

Many indicators/indices related to real estate markets are either based on list prices or selling prices whereas the latter is usually related to private data. Therefore, the relationship between these two data sets could hardly be investigated. The research in this Ph.D. work aims to enlarge the existing body of knowledge in this area.The data set in an initial part of the study comprises 1,274 transactions of owner-occupied residential properties in rural areas of Rhineland-Palatinate (Germany). The list prices are obtained from ImmoScout24, the largest German real estate brokerage website. The selling prices are acquired from official (yet private) appraisal sources that collect every real estate contract of sale in Germany. It is found that, on average, selling prices are -15.2% (-20,605 Ä) lower than the stated list prices. Moreover, 10% of the sellers had been forced to reduce the list price by more than -33.3% (-47,750 Ä) until a transaction was realized. This indicates that many sellers overestimate the value of their own property, especially in an illiquid real estate market. Several other studies from the USA or Canada came to similar conclusions. In contrast to these studies, this work found that the difference between list price and selling price is not related to common demographic, economic or location characteristics. The owner accuracy regression only indicates a strong influence of the absolute amount of the list price and the age of the dwelling structure. Besides, it is shown that list prices as such are not a perfectly reliable data source. Firstly, it is difficult to match list price and selling price of one single property because often several list prices exist for one single property. Secondly, the time-on-market and changes of the list prices are unknown, yet important to determine the selling price. The same issues applied to many house characteristics like age of the dwelling structure or quality and quantity of building appliances. In a next step, the outlined data problems will be handled with support by the data provider. Furthermore, the regression analyses (with a new sample) will be augmented by other statistical methods. Further, the set of involved variables will be extended, e.g. by owner characteristics that shall be found in surveys of ImmoScout users. The study, as the research progresses, will analyze transactions of owner-occupied residential properties in rural, urbanized and metropolitan areas. Additionally, the study contributes to the price and worth theory and to the valuation practice of residential properties. Furthermore, new scientific insights into the research field ìlist pricesî are expected.

Suggested Citation

  • Michael Dinkel, 2011. "Factors that influence listing prices and selling prices of owner-occupied residential properties in Germany," ERES eres2011_68, European Real Estate Society (ERES).
    • Handle: RePEc:arz:wpaper:eres2011_68
    as

    Download full text from publisher

    File URL: https://eres.architexturez.net/doc/oai-eres-id-eres2011-68
    Download Restriction: no
    File URL: https://eres.architexturez.net/system/files/pdf/eres2011_68.content.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Goodman, John Jr. & Ittner, John B., 1992. "The accuracy of home owners' estimates of house value," Journal of Housing Economics, Elsevier, vol. 2(4), pages 339-357, December.
    2. DiPasquale, Denise & Somerville, C. Tsuriel, 1995. "Do House Price Indices Based on Transacting Units Represent the Entire Stock? Evidence from the American Housing Survey," Journal of Housing Economics, Elsevier, vol. 4(3), pages 195-229, September.
    3. Katherine A. Kiel & Jeffrey E. Zabel, 1999. "The Accuracy of Owner‐Provided House Values: The 1978–1991 American Housing Survey," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 27(2), pages 263-298, June.
    4. Stanley McGreal & Alastair Adair & Louise Brown & James R. Webb, 2009. "Pricing and Time on the Market for Residential Properties in a Major U.K. City," Journal of Real Estate Research, American Real Estate Society, vol. 31(2), pages 209-234.
    5. John R. Knight, 2002. "Listing Price, Time on Market, and Ultimate Selling Price: Causes and Effects of Listing Price Changes," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 30(2), pages 213-237.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Clément Bellet, 2017. "Essays on Inequality, Social Preferences and Consumer Behavior," Sciences Po publications info:hdl:2441/vbu6kd1s68o, Sciences Po.
    2. Banzhaf, H. Spencer & Farooque, Omar, 2013. "Interjurisdictional housing prices and spatial amenities: Which measures of housing prices reflect local public goods?," Regional Science and Urban Economics, Elsevier, vol. 43(4), pages 635-648.
    3. Harding, John P. & Miceli, Thomas J. & Sirmans, C. F., 2000. "Deficiency Judgments and Borrower Maintenance: Theory and Evidence," Journal of Housing Economics, Elsevier, vol. 9(4), pages 267-285, December.
    4. Ronan Lyons, 2012. "Search costs, sorting and “property ladder†effects: Evidence from the valuation of amenities," ERSA conference papers ersa12p511, European Regional Science Association.
    5. Alla Koblyakova & Larisa Fleishman & Orly Furman, 2022. "Accuracy of Households’ Dwelling Valuations, Housing Demand and Mortgage Decisions: Israeli Case," The Journal of Real Estate Finance and Economics, Springer, vol. 65(1), pages 48-74, July.
    6. Clément S. Bellet, 2017. "The paradox of the Joneses: superstar houses and mortgage frenzy in suburban America," CEP Discussion Papers dp1462, Centre for Economic Performance, LSE.
    7. Bellet, Clement, 2017. "The paradox of the Joneses: superstar houses andmortgage frenzy in suburban America," LSE Research Online Documents on Economics 69044, London School of Economics and Political Science, LSE Library.
    8. Jiang, Xiandeng & Zhao, Ningru & Pan, Zheng, 2022. "Regional housing wealth, relative housing wealth and labor market behavior," Journal of Housing Economics, Elsevier, vol. 55(C).
    9. Windsor, Callan & La Cava, Gianni & Hansen, James, 2015. "Home price beliefs: Evidence from Australia," Journal of Housing Economics, Elsevier, vol. 29(C), pages 41-58.
    10. repec:tcd:tcduee:tep051 is not listed on IDEAS
    11. repec:hal:spmain:info:hdl:2441/vbu6kd1s68o6r34k5bcm3iopv is not listed on IDEAS
    12. Tur-Sinai, Aviad & Fleishman, Larisa & Romanov, Dmitri, 2020. "The accuracy of self-reported dwelling valuation," Journal of Housing Economics, Elsevier, vol. 48(C).
    13. David A Keiser & Joseph S Shapiro, 2019. "Consequences of the Clean Water Act and the Demand for Water Quality," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 134(1), pages 349-396.
    14. Benítez-Silva, Hugo & Eren, Selçuk & Heiland, Frank & Jiménez-Martín, Sergi, 2015. "How well do individuals predict the selling prices of their homes?," Journal of Housing Economics, Elsevier, vol. 29(C), pages 12-25.
    15. Paul Bennett & Gordon Monsen & Richard Peach & Stavros Peristiani & Jonathan Raiff, 1996. "Effects of household creditworthiness on mortgage refinancings," Research Paper 9622, Federal Reserve Bank of New York.
    16. Rosane Hungria-Gunnelin, 2013. "Impact of Number of Bidders on Sale Price of Auctioned Condominium Apartments in Stockholm," International Real Estate Review, Global Social Science Institute, vol. 16(3), pages 274-295.
    17. Fesselmeyer, Eric & Le, Kien T. & Seah, Kiat Ying, 2013. "Changes in the white–black house value distribution gap from 1997 to 2005," Regional Science and Urban Economics, Elsevier, vol. 43(1), pages 132-141.
    18. Liang, Cong & Hui, Eddie C.M. & Yip, Tsz Leung, 2018. "Time on market (TOM): The impact of new residential stamp duty," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 503(C), pages 1117-1130.
    19. Shan, Hui, 2011. "The effect of capital gains taxation on home sales: Evidence from the Taxpayer Relief Act of 1997," Journal of Public Economics, Elsevier, vol. 95(1), pages 177-188.
    20. Shimizu, Chihiro & Nishimura, Kiyohiko G. & Watanabe, Tsutomu, 2016. "House prices at different stages of the buying/selling process," Regional Science and Urban Economics, Elsevier, vol. 59(C), pages 37-53.
    21. Liang, Cong & Hui, Eddie C.M. & Yip, Tsz Leung & Huang, Yaoxuan, 2020. "Private land use for public housing projects: The Influence of a Government Announcement on Housing Markets in Hong Kong," Land Use Policy, Elsevier, vol. 99(C).
    22. Callan Windsor & Gianni La Cava & James Hansen, 2014. "Home Price Beliefs in Australia," RBA Research Discussion Papers rdp2014-04, Reserve Bank of Australia.

    More about this item

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arz:wpaper:eres2011_68. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Architexturez Imprints (email available below). General contact details of provider: https://edirc.repec.org/data/eressea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.