Do Values of Existing Home Sales Reflect Property Values?

Gregory Huffman

No 122, Vanderbilt University Department of Economics Working Papers from Vanderbilt University Department of Economics

Abstract: In many locales, the average price of existing home sales is used as an of indicator home prices. This information is then used to establish the value of the property for tax purposes. A simple example is presented here to show that this approach can be very misleading. In this example, the average price of existing home sales is always rising at the rate of growth of the economy, and yet the price each home remains constant.

Keywords: Asset pricing; home prices; transaction volume (search for similar items in EconPapers)
JEL-codes: G12 R21 R51 (search for similar items in EconPapers)
Date: 2001-09
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Persistent link: https://EconPapers.repec.org/RePEc:van:wpaper:0122

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