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The Evidence of Buyer Bargaining Power in The Stockholm Residential Real Estate Market

Author

Listed:
  • Mats Wilhelmsson

    (Royal Institute of Technology Real Estate Economics, Stockholm, SWEDEN)

Abstract

The objective is to investigate whether uninformed buyers pay higher prices for single-family houses than do other buyers and test whether the bargaining power increases with information. We examine data on real estate prices and attributes, as well as household characteristics and buying process from Stockholm. Our results show that uninformed buyers seem to pay a higher price than informed buyers do. Bargaining power is not weaker for a first-time buyer but is weaker if the household has participated in several biddings and lost. Repeated bidding-and-losing households are more willing to increase their reservation price and pay a higher overall price compared to other households.

Suggested Citation

  • Mats Wilhelmsson, 2008. "The Evidence of Buyer Bargaining Power in The Stockholm Residential Real Estate Market," Journal of Real Estate Research, American Real Estate Society, vol. 30(4), pages 475-500.
    • Handle: RePEc:jre:issued:v:30:n:4:2008:p:475-500
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    Citations

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    Cited by:

    1. Steven Caudill & Claudio Detotto & Dominique Prunetti, 2020. "Bargaining power in apartment sales in Corsica: A latent class approach," Urban Studies, Urban Studies Journal Limited, vol. 57(13), pages 2754-2772, October.
    2. Justin Benefield & Ronald Rutherford & Marcus Allen, 2012. "The Effects of Estate Sales of Residential Real Estate on Price and Marketing Time," The Journal of Real Estate Finance and Economics, Springer, vol. 45(4), pages 965-981, November.
    3. Wang, Weifang, 2021. "Nuanced insights into land buyer perceptions of engaging in rural land transactions from a cost perspective: Evidence from China’s emerging rural land market," Land Use Policy, Elsevier, vol. 108(C).
    4. Eric Levin & Gwilym Pryce, 2011. "A Disequilibrium Model of the Market for Houses: Implicit Selling Time as a Signal of Optimal Holding Periods and Buyer Valuation," Urban Studies, Urban Studies Journal Limited, vol. 48(11), pages 2249-2263, August.
    5. Steegmans, Joep & Hassink, Wolter, 2017. "Financial position and house price determination: An empirical study of income and wealth effects," Journal of Housing Economics, Elsevier, vol. 36(C), pages 8-24.
    6. 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.
    7. Rocco Curto & Elena Fregonara, 2019. "Monitoring and Analysis of the Real Estate Market in a Social Perspective: Results from the Turin’s (Italy) Experience," Sustainability, MDPI, vol. 11(11), pages 1-22, June.

    More about this item

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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