Seller-Paid Concessions from 2004-2012: Implications for House Selling Price and Days on the Market
Daniel T. Winkler () and
Bruce L. Gordon ()
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Daniel T. Winkler: University of North Carolina at Greensboro
Bruce L. Gordon: University of North Alabama
Journal of Real Estate Research, 2015, vol. 37, issue 4, 537-562
Previous research has examined the extent to which seller-paid concessions (SPCs) are capitalized in house selling prices. Most of these studies are limited to regular, non-foreclosed property sales and non-distressed time periods. This study examines foreclosed and non-foreclosed housing selling prices and DOM from Q1:2004-Q1:2012, the years surrounding the 2008-09 housing debacle. The findings suggest that SPCs are fully capitalized into the net selling price of non-foreclosed properties but a 6.7% - 15.0% price premium occurs for foreclosed property prices. In addition, non-foreclosed transactions with SPCs have up to 19.5% longer days on the market (DOM) during this time period. The effect of SPCs on price and DOM vary before and after the housing debacle. This finding supports a growing literature indicating that abrupt changes in economic conditions influence price premiums and discounts through adjustments in magnitude of the underlying explanatory variables.
JEL-codes: L85 (search for similar items in EconPapers)
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