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Days on Market and Home Sales

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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File URL: http://www.netinst.org/Tucker_Zhang_Zhu_09-16.pdf
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Paper provided by NET Institute in its series Working Papers with number 09-16.

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Length: 35 pages
Date of creation: Aug 2009
Date of revision: Aug 2009
Handle: RePEc:net:wpaper:0916
Contact details of provider: Web page: http://www.NETinst.org/

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