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Are New Homes Special?

Author

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  • N. Edward Coulson
  • Adele C. Morris
  • Helen R. Neill

Abstract

This article describes alternative ways of identifying new homes and, using a large dataset of property sales in Las Vegas, Nevada, tests for the extent to which new homes sell at a price premium relative to otherwise similar existing homes. We also investigate whether the results differ across time and location, including before and after the housing bust. Our results suggest that price premia for new homes arise primarily in circumstances in which the supply of new houses is relatively low. In some cases rising to over 20% relative to otherwise similar existing homes. When new homes are plentiful, they are not special and the premium disappears.

Suggested Citation

  • N. Edward Coulson & Adele C. Morris & Helen R. Neill, 2019. "Are New Homes Special?," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 47(3), pages 784-806, September.
    • Handle: RePEc:bla:reesec:v:47:y:2019:i:3:p:784-806
    DOI: 10.1111/1540-6229.12165
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    Cited by:

    1. Mayock, Tom & Tzioumis, Konstantinos, 2021. "New construction and mortgage default," Journal of Banking & Finance, Elsevier, vol. 133(C).
    2. Lopez, Luis A. & Yoshida, Jiro, 2022. "Estimating housing rent depreciation for inflation adjustments," Regional Science and Urban Economics, Elsevier, vol. 95(C).
    3. Siu Kei Wong & Ling Li & Paavo Monkkonen, 2019. "How do Developers Price New Housing in a Highly Oligopolistic City?," International Real Estate Review, Asian Real Estate Society, vol. 22(3), pages 309-333.
    4. Siu Kei Wong & Ling Li & Paavo Monkkonen, 2019. "How do Developers Price New Housing in a Highly Oligopolistic City?," International Real Estate Review, Global Social Science Institute, vol. 22(3), pages 307-331.

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