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House Price Changes and Idiosyncratic Risk: The Impact of Property Characteristics

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Author Info
Steven Bourassa () (School of Urban and Public Affairs, University of Louisville)
Donald Haurin () (Department of Economics, Ohio State University)
Jessica Haurin () (Center for Real Estate, Massachusetts Institute of Technology)
Martin Hoesli () (University of Geneva)
Jian Sun () (School of Urban and Public Affairs, University of Louisville)

Additional information is available for the following registered author(s):

Abstract

While the average change in house prices is related to changes in fundamentals or perhaps market-wide bubbles, not all houses in a market appreciate at the same rate. The primary focus of our study is to investigate the reasons for these variations in price changes among houses within a market. We draw on two theories for guidance, one related to the optimal search strategy for sellers of atypical dwellings and the other focusing on the bargaining process between a seller and potential buyers. We hypothesize that houses will appreciate at different rates depending on the characteristics of the property and the change in the strength of the housing market. These hypotheses are supported using data from three New Zealand housing markets.

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File URL: http://www.econ.ohio-state.edu/haurin/wp/House%20Price%20Changes%20and%20Idiosyncratic%20Risk.pdf
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Publisher Info
Paper provided by Ohio State University, Department of Economics in its series Working Papers with number 07-03.

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Length: 33 pages
Date of creation: Jan 2007
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Handle: RePEc:osu:osuewp:07-03

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Postal: 410 Arps Hall 1945 North High Street Columbus, Ohio 43210-1172

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Related research
Keywords: Atypicality Bargaining Housing Risk House Price Appreciation Search Models

Other versions of this item:

Find related papers by JEL classification:
R31 - Urban, Rural, and Regional Economics - - Production Analysis and Firm Location - - - Housing Supply and Markets
R21 - Urban, Rural, and Regional Economics - - Household Analysis - - - Housing Demand
D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information

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  5. Dennis R. Capozza & Ryan D. Israelsen & Thomas A. Thomson, 2005. "Appraisal, Agency and Atypicality: Evidence from Manufactured Homes," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 33(3), pages 509-537, 09. [Downloadable!] (restricted)
  6. Archer*, Wayne R. & Gatzlaff+, Dean H. & Ling*, David C., 1996. "Measuring the Importance of Location in House Price Appreciation," Journal of Urban Economics, Elsevier, vol. 40(3), pages 334-353, November. [Downloadable!] (restricted)
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    Other versions:
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  17. Michel Glower & Donald R. Haurin & Patric H. Hendershott, 1995. "Selling Price and Selling Time: The Impact of Seller Motivation," NBER Working Papers 5071, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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    Other versions:
  19. John P. Harding & John R. Knight & C.F. Sirmans, 2003. "Estimating Bargaining Effects in Hedonic Models: Evidence from the Housing Market," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 31(4), pages 601-622, December. [Downloadable!] (restricted)
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    Other versions:
  22. Marjorie Flavin & Takashi Yamashita, 2002. "Owner-Occupied Housing and the Composition of the Household Portfolio," American Economic Review, American Economic Association, vol. 92(1), pages 345-362, March. [Downloadable!]
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