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Cash Equivalency in Dichotomous Residential Markets

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Abstract

When a residential sale is financed using a below-market rate of interest, as with a mortgage assumption or a contract for deed, the sale price may have incorporated into it the capitalized value of the financing. One technique that is used to determine the value of the below-market financing is the cash equivalency calculation. Using cash equivalency, this study addresses the question of whether advantageous financing has the same value in two separate and dichotomous housing markets.

Suggested Citation

  • Steven P. Mooney, 1990. "Cash Equivalency in Dichotomous Residential Markets," Journal of Real Estate Research, American Real Estate Society, vol. 5(1), pages 89-106.
    • Handle: RePEc:jre:issued:v:5:n:1:1990:p:89-106
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    References listed on IDEAS

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    1. Vinod B. Agarwal & Richard A. Philips, 1985. "The Effects of Assumption Financing Across Housing Price Categories," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 13(1), pages 48-57, March.
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    More about this item

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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