Days on Market and Home Sales
AbstractIn April 2006, the real estate listing service in Massachusetts adopted a new policy that prohibits home sellers from resetting their property’s “days on market” to zero through relisting. We study the effect of this new policy on single-family home sales along the Massachusetts-Rhode Island border, using homes in Rhode Island, which did not change its policy, as the control group. We find that the policy change leads to a relative sale price reduction of around $11,000 for affected homes in Massachusetts. Homes caught in the middle of the policy change are the hardest hit; the sudden release of the cumulative days on market information lowers the average sale price by $21,500. Sellers respond to the new policy by reducing the listing price to shorten their property’s days on market.
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Bibliographic InfoPaper provided by NET Institute in its series Working Papers with number 09-16.
Length: 35 pages
Date of creation: Aug 2009
Date of revision: Aug 2009
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Web page: http://www.NETinst.org/
Days on Market; Relisting; herding;
Other versions of this item:
- D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
- L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services
- R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
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- Nathan Yang, 2011. "An Empirical Model of Industry Dynamics with Common Uncertainty and Learning from the Actions of Competitors," Working Papers 11-16, NET Institute.
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