Price signals in illiquid markets:The case of residential property in Ireland, 2006-2012
How do list and sale prices relate to each other over the market cycle? Using a dataset of over 650,000 Irish property listings and transactions between 2006 and 2012, this research examines the relationship between list and sale prices. It applies hedonic methods and exploits information on time-to-sell and time-to-drawdown to decompose the gap between list and sale prices into four spreads: the selection spread, capturing the price difference between properties that sell and all listings; the matching spread, which reflects time-to-sell and is countercyclical; the drawdown spread, reflecting administrative costs; and the counteroffer spread, which is the closest counterpart to a bid-ask spread in the housing market and is procyclical.
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- J. R. Knight & Jonathan Dombrow & C. F. Sirmans, 1995. "A Varying Parameters Approach to Constructing House Price Indexes," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 23(2), pages 187-205.
- Kennedy, Gerard & McIndoe Calder, Tara, 2011.
"The Irish Mortgage Market: Stylised Facts, Negative Equity and Arrears,"
Research Technical Papers
12/RT/11, Central Bank of Ireland.
- Kennedy, Gerard & McIndoe-Calder, Tara, 2012. "The Irish Mortgage Market: Stylised Facts, Negative Equity and Arrears," Quarterly Bulletin Articles, Central Bank of Ireland, pages 85-108, February.
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