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Paper eres2016_11:
Does the asking price matter? Evidence from a natural experiment in residential real estate

id eres2016_11
authors O_sterling, Anders
year 2016
title Does the asking price matter? Evidence from a natural experiment in residential real estate
source 23rd Annual European Real Estate Society Conference in Regensburg, Germany
summary I study a staggered policy change directly affecting only the asking price of homes for sale, using a novel and large micro dataset. I find that increasing the asking price reduces the number of online views, the number of visitors to the open house viewings, the number of bidders participating in the auction-like sales process and increases the time on market. Contrary to predictions of standard theory I find no effect on the sales price, nor on the sales effort exerted by real estate agents. To explain these findings I develop a simple search model where the non-committing asking price directs search and real estate agents set the asking price optimally. The model is consistent with the empirical results when home buyers follow a simple rule of thumb, but not when they act fully rational.
series ERES:conference
type paper session
discussion No discussions. Post discussion ...
ratings
session Residential Real Estate
last changed 2017/11/18 16:16
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