Repair Expenses, Selling Contracts, and House Prices
This paper examines the impact of repair expenses on the selling price of a house. Using data from settlement statements, we investigate the frequency and extent to which performance of major repairs is part of the sales contract. We find that most homes are restored to a "normally maintained" state each time the home changes hands, and that the cost of bringing the home to this condition is included as part of house selling price. This implies it may be unnecessary to measure maintenance levels when using transaction data to study components of house price or to construct house price indexes.
Volume (Year): 20 (2000)
Issue (Month): 3 ()
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- Richard Arnott & Russell Davidson & David Pines, 1983. "Housing Quality, Maintenance and Rehabilitation," Review of Economic Studies, Oxford University Press, vol. 50(3), pages 467-494.
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- Chinloy, Peter, 1980. "The effect of maintenance expenditures on the measurement of depreciation in housing," Journal of Urban Economics, Elsevier, vol. 8(1), pages 86-107, July.
- Sirmans, G. Stacy & Smith, Stanley D. & Sirmans, C. F., 1983. "Assumption Financing and Selling Price of Single-Family Homes," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 18(03), pages 307-317, September.
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