IDEAS home Printed from https://ideas.repec.org/p/arz/wpaper/eres2009_307.html
   My bibliography  Save this paper

Competing Risks in a Time-on-the-Market Analysis

Author

Listed:
  • Erik R. de Wit

Abstract

Sellers of owner occupied dwellings can decrease the expected time-till- sale of their dwelling by lowering the advertised listprice of the dwelling.This article investigates the e ect of listprice reductions on the transition rates of dwellings from the market through i) a sale, or ii) a withdrawal from the market. We use a timing-of-events model with competing risks (a sale or a withdrawal of the dwelling from the market). Our data con- sists of all dwellings put on the market between the start of 2005 and the end of 2007, o ered through brokers which are a member of the NVM (Dutch Real Estate Brokers Association). Our data covers approximately 75% of all owner occupied dwellings o ered for sale in the Netherlands during this period. We nd that a listprice reduction raises the transi- tion rate from market to sale by more than 260%, a listprice reduction raises the transition rate from market to withdrawal by more than 40%.

Suggested Citation

  • Erik R. de Wit, 2009. "Competing Risks in a Time-on-the-Market Analysis," ERES eres2009_307, European Real Estate Society (ERES).
    • Handle: RePEc:arz:wpaper:eres2009_307
    as

    Download full text from publisher

    File URL: https://eres.architexturez.net/doc/oai-eres-id-eres2009-307
    Download Restriction: no
    File URL: https://eres.architexturez.net/system/files/pdf/eres2009_307.content.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Heckman, James & Singer, Burton, 1984. "A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data," Econometrica, Econometric Society, vol. 52(2), pages 271-320, March.
    2. James Albrecht & Pieter Gautier & Susan Vroman, 2016. "Directed Search in the Housing Market," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 19, pages 218-231, January.
    3. Huang, Ju-Chin & Palmquist, Raymond B, 2001. "Environmental Conditions, Reservation Prices, and Time on the Market for Housing," The Journal of Real Estate Finance and Economics, Springer, vol. 22(2-3), pages 203-219, March-May.
    4. Olsen, Edgar O, 1969. "A Competitive Theory of the Housing Market," American Economic Review, American Economic Association, vol. 59(4), pages 612-622, Part I Se.
    5. repec:arz:wpaper:eres2009-347 is not listed on IDEAS
    6. Anglin, Paul M & Rutherford, Ronald & Springer, Thomas M, 2003. "The Trade-Off Between the Selling Price of Residential Properties and Time-on-the-Market: The Impact of Price Setting," The Journal of Real Estate Finance and Economics, Springer, vol. 26(1), pages 95-111, January.
    7. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    8. Stephen G. Donald & David A. Green & Harry J. Paarsch, 2000. "Differences in Wage Distributions Between Canada and the United States: An Application of a Flexible Estimator of Distribution Functions in the Presence of Covariates," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 67(4), pages 609-633.
    9. de Wit, Erik R. & van der Klaauw, Bas, 2013. "Asymmetric information and list-price reductions in the housing market," Regional Science and Urban Economics, Elsevier, vol. 43(3), pages 507-520.
    10. Lazear, Edward P, 1986. "Retail Pricing and Clearance Sales," American Economic Review, American Economic Association, vol. 76(1), pages 14-32, March.
    11. Curtis R. Taylor, 1999. "Time-on-the-Market as a Sign of Quality," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 66(3), pages 555-578.
    12. Wouter Vermeulen & Jan Rouwendal, 2007. "Housing supply in the Netherlands," CPB Discussion Paper 87, CPB Netherlands Bureau for Economic Policy Analysis.
    13. Caplin, Andrew & Leahy, John, 1996. "Trading Costs, Price, and Volume in Asset Markets," American Economic Review, American Economic Association, vol. 86(2), pages 192-196, May.
    14. Zuehlke, Thomas W, 1987. "Duration Dependence in the Housing Market," The Review of Economics and Statistics, MIT Press, vol. 69(4), pages 701-704, November.
    15. Gwilym Pryce & Kenneth Gibb, 2006. "Submarket Dynamics of Time to Sale," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 34(3), pages 377-415, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. de Wit, Erik R. & van der Klaauw, Bas, 2013. "Asymmetric information and list-price reductions in the housing market," Regional Science and Urban Economics, Elsevier, vol. 43(3), pages 507-520.
    2. Aydin, Erdal & Correa, Santiago Bohórquez & Brounen, Dirk, 2019. "Energy performance certification and time on the market," Journal of Environmental Economics and Management, Elsevier, vol. 98(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. de Wit, Erik R. & van der Klaauw, Bas, 2013. "Asymmetric information and list-price reductions in the housing market," Regional Science and Urban Economics, Elsevier, vol. 43(3), pages 507-520.
    2. Justin Benefield & Ronald Rutherford & Marcus Allen, 2012. "The Effects of Estate Sales of Residential Real Estate on Price and Marketing Time," The Journal of Real Estate Finance and Economics, Springer, vol. 45(4), pages 965-981, November.
    3. Guignet, Dennis B. & Martinez-Cruz, Adan L., 2018. "The impacts of underground petroleum releases on a homeowner's decision to sell: A difference-in-differences approach," Regional Science and Urban Economics, Elsevier, vol. 69(C), pages 11-24.
    4. Edward P. Lazear, 2010. "Why Do Inventories Rise When Demand Falls in Housing and Other Markets?," NBER Working Papers 15878, National Bureau of Economic Research, Inc.
    5. Daniel Broxterman & Tingyu Zhou, 2023. "Information Frictions in Real Estate Markets: Recent Evidence and Issues," The Journal of Real Estate Finance and Economics, Springer, vol. 66(2), pages 203-298, February.
    6. Terrence Clauretie & Paul Thistle, 2007. "The Effect of Time-on-Market and Location on Search Costs and Anchoring: The Case of Single-Family Properties," The Journal of Real Estate Finance and Economics, Springer, vol. 35(2), pages 181-196, August.
    7. Nasser Daneshvary & Terrence Clauretie, 2013. "Agent Change and Seller Bargaining Power: A Case of Principal Agent Problem in the Housing Market," The Journal of Real Estate Finance and Economics, Springer, vol. 47(3), pages 416-433, October.
    8. Liang, Cong & Hui, Eddie C.M. & Yip, Tsz Leung, 2018. "Time on market (TOM): The impact of new residential stamp duty," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 503(C), pages 1117-1130.
    9. Bian, Xun & Waller, Bennie D. & Turnbull, Geoffrey K. & Wentland, Scott A., 2015. "How many listings are too many? Agent inventory externalities and the residential housing market," Journal of Housing Economics, Elsevier, vol. 28(C), pages 130-143.
    10. Crocker H. Liu & Adam Nowak & Stuart Rosenthal, 2014. "Bubbles, Post-Crash Dynamics, and the Housing Market," Working Papers 14-18, Department of Economics, West Virginia University.
    11. Sumit Agarwal & Michael J. Seiler & Ralph Siebert, 2022. "Do as Essay, Not as I Do? How Inflated List Prices of Unsold Essayer Homes Affect the Price Discovery Process," CESifo Working Paper Series 10069, CESifo.
    12. Bich Hong Nguyen Thi & Trong Hoai Nguyen & Thanh Hiep Truong, 2020. "The Role of Listing Price Strategies on the Probability of Selling a House: Evidence from Vietnam," Real Estate Management and Valuation, Sciendo, vol. 28(2), pages 63-75, June.
    13. Charles Ka Yui Leung & Youngman Chun Fai Leong & Ida Yin Sze Chan, 2002. "TOM: Why Isn’t Price Enough?," International Real Estate Review, Global Social Science Institute, vol. 5(1), pages 91-115.
    14. Donner, Herman, 2017. "Determinants of a Foreclosure Discount," Working Paper Series 17/2, Royal Institute of Technology, Department of Real Estate and Construction Management & Banking and Finance.
    15. An, Zhiyong & Cheng, Ping & Lin, Zhenguo & Liu, Yingchun, 2013. "How do market conditions impact price-TOM relationship? Evidence from real estate owned (REO) sales," Journal of Housing Economics, Elsevier, vol. 22(3), pages 250-263.
    16. Stephen A. Samaha & Wagner A. Kamakura, 2008. "Assessing the Market Value of Real Estate Property with a Geographically Weighted Stochastic Frontier Model," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 36(4), pages 717-751, December.
    17. Han, Lu & Strange, William C., 2015. "The Microstructure of Housing Markets," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 813-886, Elsevier.
    18. Terrence M. Clauretie & Nasser Daneshvary, 2009. "Estimating the House Foreclosure Discount Corrected for Spatial Price Interdependence and Endogeneity of Marketing Time," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 37(1), pages 43-67, March.
    19. Stanley McGreal & Paloma Taltavull de La Paz & Valerie Kupke & Peter Rossini & Paul Kershaw, 2016. "Measuring the influence of space and time effects on time on the market," Urban Studies, Urban Studies Journal Limited, vol. 53(13), pages 2867-2884, October.
    20. Irwin, Nicholas & Wolf, David, 2022. "Time is money: Water quality's impact on home liquidity and property values," Ecological Economics, Elsevier, vol. 199(C).

    More about this item

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arz:wpaper:eres2009_307. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Architexturez Imprints (email available below). General contact details of provider: https://edirc.repec.org/data/eressea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.