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Days on market and home sales

Author

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  • Catherine Tucker
  • Juanjuan Zhang
  • Ting Zhu

Abstract

In 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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Suggested Citation

  • Catherine Tucker & Juanjuan Zhang & Ting Zhu, 2013. "Days on market and home sales," RAND Journal of Economics, RAND Corporation, vol. 44(2), pages 337-360, June.
    • Handle: RePEc:bla:randje:v:44:y:2013:i:2:p:337-360
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    File URL: http://hdl.handle.net/10.1111/rand.2013.44.issue-2
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    Cited by:

    1. Xin He & Zhenguo Lin & Yingchun Liu & Michael J. Seiler, 2020. "Search Benefit in Housing Markets: An Inverted U‐Shaped Price and TOM Relation," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 48(3), pages 772-807, September.
    2. 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.
    3. Park, Eunho & Lim, Joon Ho, 2025. "The impact of healthcare data breaches on patient hospital visit behavior," International Journal of Research in Marketing, Elsevier, vol. 42(4), pages 1285-1304.
    4. Tommaso Bondi, 2019. "Alone, Together. Product Discovery Through Consumer Ratings," Working Papers 19-09, NET Institute.
    5. Palazzo, Francesco, 2017. "Search costs and the severity of adverse selection," Research in Economics, Elsevier, vol. 71(1), pages 171-197.
    6. Vrinda Kadiyali & Jeffrey Prince & Daniel Simon, 2014. "Is Dual Agency in Real Estate a Cause for Concern?," The Journal of Real Estate Finance and Economics, Springer, vol. 48(1), pages 164-195, January.
    7. Eerola, Essi & Lyytikäinen, Teemu, 2015. "On the role of public price information in housing markets," Regional Science and Urban Economics, Elsevier, vol. 53(C), pages 74-84.
    8. Martel, Jordan, 2018. "Quality, price, and time-on-market," Economics Letters, Elsevier, vol. 171(C), pages 97-101.
    9. Qiyuan Wang, 2024. "For-Sale-by-Owner Platforms and Intermediation Pricing: Evidence from a Natural Experiment," Marketing Science, INFORMS, vol. 43(2), pages 346-359, March.
    10. Ni Huang & Tianshu Sun & Peiyu Chen & Joseph M. Golden, 2019. "Word-of-Mouth System Implementation and Customer Conversion: A Randomized Field Experiment," Information Systems Research, INFORMS, vol. 30(3), pages 805-818, September.
    11. Jeong Ho (John) Kim & Kyungmin Kim & Marilyn Pease, 2024. "Unemployment Duration Under Flexible Information Acquisition," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 65(1), pages 471-503, February.
    12. Tong Guo & Srinivasaraghavan Sriram & Puneet Manchanda, 2020. "“Let the Sunshine In”: The Impact of Industry Payment Disclosure on Physician Prescription Behavior," Marketing Science, INFORMS, vol. 39(3), pages 516-539, May.
    13. 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.
    14. Justin T. Kistler & Ramkumar Janakiraman & Subodha Kumar & Vikram Tiwari, 2021. "The Effect of Operational Process Changes on Preoperative Patient Flow: Evidence from Field Research," Production and Operations Management, Production and Operations Management Society, vol. 30(6), pages 1647-1667, June.
    15. Bruce L. Gordon & Daniel T. Winkler, 2017. "The Effect of Listing Price Changes on the Selling Price of Single-Family Residential Homes," The Journal of Real Estate Finance and Economics, Springer, vol. 55(2), pages 185-215, August.
    16. Sushil Bikhchandani & David Hirshleifer & Omer Tamuz & Ivo Welch, 2024. "Information Cascades and Social Learning," Journal of Economic Literature, American Economic Association, vol. 62(3), pages 1040-1093, September.
    17. Aydin, Erdal & Correa, Santiago Bohórquez & Brounen, Dirk, 2019. "Energy performance certification and time on the market," Journal of Environmental Economics and Management, Elsevier, vol. 98(C).
    18. Hayunga, Darren K. & Swymer, William, 2025. "Relisting, agent switching, and sale outcomes in the housing market," Journal of Housing Economics, Elsevier, vol. 69(C).
    19. Michaletz Vladimir B. & Artemenkov Andrey, 2018. "A Demand - and Supply- Side Constrained Model for Liquidation Value and Related Exposure Periods," Real Estate Management and Valuation, Sciendo, vol. 26(2), pages 48-59, June.

    More about this item

    JEL classification:

    • 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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