Housing prices and the optimal time-on-the-market decision

Hazer İnaltekin, Robert Jarrow (), Mehmet Sağlam and Yildiray Yildirim

Finance Research Letters, 2011, vol. 8, issue 4, 171-179

Abstract: This paper provides a model for housing prices based on a seller solving the optimal time-on-the market problem. Given the seller’s optimal time-on-the market, analytical expressions are provided for both the expected time-on-the-market and the sales price. These expressions facilitate the computation of comparative statics. Consistent with economic intuition, we show that (i) both the expected time-on-the market and sales price decrease as interest rates increase, (ii) the expected time-on-the market increases and the expected sales price decreases as offer activity declines, and (iii) the expected time-on-the market and expected sales price both increase as the list price increases.

Keywords: Real estate; Sale price; Time-on-the-market; Optimal waiting time (search for similar items in EconPapers)
JEL-codes: G10 R21 R31 R34 (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:8:y:2011:i:4:p:171-179

DOI: 10.1016/j.frl.2011.06.001

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