Days on Market and Home Sales

Catherine Tucker (), Juanjuan Zhang () and Ting Zhu ()
Additional contact information
Catherine Tucker: Sloan School of Management, MIT, http://cetucker.scripts.mit.edu/
Juanjuan Zhang: Sloan School of Management, MIT, http://jjzhang.scripts.mit.edu/
Ting Zhu: Booth School of Business, University of Chicago, http://www.chicagobooth.edu/faculty/bio.aspx?person_id=12826019840

No 09-16, Working Papers from NET Institute

Abstract: In April 2006, the real estate listing service in Massachusetts adopted a new policy that prohibits home sellers from resetting their property’s “days on market” to zero through relisting. We study the effect of this new policy on single-family home sales along the Massachusetts-Rhode Island border, using homes in Rhode Island, which did not change its policy, as the control group. We find that the policy change leads to a relative sale price reduction of around $11,000 for affected homes in Massachusetts. Homes caught in the middle of the policy change are the hardest hit; the sudden release of the cumulative days on market information lowers the average sale price by $21,500. Sellers respond to the new policy by reducing the listing price to shorten their property’s days on market.

Keywords: Days on Market; Relisting; herding (search for similar items in EconPapers)
JEL-codes: D80 L85 R21 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ure
Date: 2009-08, Revised 2009-08

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