Home Price,Time-on-Market,and Seller Heterogeneity Under Changing Market Conditions |
| |
Authors: | Ping Cheng Zhenguo Lin Yingchun Liu |
| |
Institution: | (1) Department of Industry Study, College of Business, Florida Atlantic University, 777 Glades Road, Boca Raton, FL 33431, USA;(2) Fannie Mae, 3900 Wisconsin Avenue, Washington, DC 20016, USA |
| |
Abstract: | This paper develops a formal model to examine the effect of changing market conditions and individuals’ selling constraints
on selling price and time-on-market. Using the concept of Relative Liquidity Constraint (RLC)—a stochastic variable that captures
the randomness of future individual constraints and market conditions—the study presents the first ex ante analysis that extends
the investigation of the issue of seller heterogeneity to the point of the buying decision, that is, from the perspective
of the buyer’s (future seller’s) point of view. We show that seller constraint, as well as the uncertainty of such a constraint,
significantly depresses the expected selling price and increases risk. Our closed-form formulas provide a set of simple quantitative
tools that enable buyers and sellers to adjust the “market average” to their ex ante “individual expectations”. |
| |
Keywords: | |
本文献已被 SpringerLink 等数据库收录! |
|