Listing strategies and housing busts: Cutting loss or cutting list price?
Xiaolong Liu and
Arno J. van der Vlist
Journal of Housing Economics, 2019, vol. 43, issue C, 102-117
Listing a house for sale has been referred to as the most agonizing and stressful decision associated with selling one’s home. This may seem particularly true for homeowners expecting to sell for less than their original purchase price. In this paper, we investigate whether listing strategies among homeowners who face potential loss differ from those who do not. We use MLS data from the Randstad area of the Netherlands for the period 2008–2013 for which we have detailed information regarding the listing strategies. We find that those homeowners who expect loss set higher initial list price by 10% on average than those homeowners who do not. Sellers with prospective loss upon initial listing are more likely and more aggressively to revise their list price downward than other sellers.
Keywords: Housing; Loss; Property transaction; List price revision; STAR model (search for similar items in EconPapers)
JEL-codes: D83 R21 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhouse:v:43:y:2019:i:c:p:102-117
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