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Listing strategies and housing busts: cutting loss or cutting list price?

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  • Xiaolong Liu
  • Arno Van der Vlist

Abstract

Listing your house for sale has been referred to as ‘the most agonizing and among the most stressful decision’ that go with selling a home. This may seem particularly so for homeowners expecting to sell for less than their original purchase price. In this paper, we investigate whether listing strategies among homeowners who experience a potential loss differ from those not experiencing a potential loss. We use MLS data from the Randstad area of The Netherlands over 2008 - 2013 for which we have detailed information regarding the listing strategies. We find that those homeowners who expect a loss; set higher initial list prices, are more likely to and more aggressively revising their list prices downwards, and set final list prices still above those of homeowners not expecting a loss upon initial listing. Further, we find sellers' motivation to be an important underlying driver in listing strategies.

Suggested Citation

  • Xiaolong Liu & Arno Van der Vlist, 2017. "Listing strategies and housing busts: cutting loss or cutting list price?," ERES eres2017_366, European Real Estate Society (ERES).
    • Handle: RePEc:arz:wpaper:eres2017_366
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    1. Donald R. Haurin & Jessica L. Haurin & Taylor Nadauld & Anthony Sanders, 2010. "List Prices, Sale Prices and Marketing Time: An Application to U.S. Housing Markets," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 38(4), pages 659-685, Winter.
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    Cited by:

    1. Lawrence Kryzanowski & Yanting Wu, 2023. "Signaling effects of recurrent list‐price reductions on the likelihood of house sales," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 46(1), pages 99-130, February.

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    More about this item

    Keywords

    Housing; list price revision; loss; property transaction;
    All these keywords.

    JEL classification:

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

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