HOUSING MARKET DISCOUNT RATES: EVIDENCE FROM BARGAINING AND BIDDING WARS

Hans Koster and Jan Rouwendal

International Economic Review, 2024, vol. 65, issue 2, 955-1002

Abstract: When selling a home, through the choice of the list price, sellers make a trade‐off between achieving a quick sale at a low price or waiting for higher bids. This list‐price setting decision is governed by a discount rate. Using data on housing sales in the Netherlands, we derive gross discount rates under bilateral bargaining and bidding wars. The estimated discount rates are 25%–35%, which are considerably higher than long‐run housing market discount rates and may result from the seller's unfamiliarity with the selling process. The rates are higher for sellers that already moved and have a low education.

Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/iere.12679

Related works:
Working Paper: Housing market discount rates: Evidence from bargaining and bidding wars (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wly:iecrev:v:65:y:2024:i:2:p:955-1002

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0020-6598

Access Statistics for this article

International Economic Review is currently edited by Michael O'Riordan and Dirk Krueger

More articles in International Economic Review from Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association 160 McNeil Building, 3718 Locust Walk, Philadelphia, PA 19104-6297. Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().