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Days on Market and Home Sales

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Abstract
In April 2006, the real estate listing service in Massachusetts adopted a new policy that prohibits home sellers from resetting their property’s “days on market” to zero through relisting. We study the effect of this new policy on single-family home sales along the Massachusetts-Rhode Island border, using homes in Rhode Island, which did not change its policy, as the control group. We find that the policy change leads to a relative sale price reduction of around $11,000 for affected homes in Massachusetts. Homes caught in the middle of the policy change are the hardest hit; the sudden release of the cumulative days on market information lowers the average sale price by $21,500. Sellers respond to the new policy by reducing the listing price to shorten their property’s days on market.

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  • Catherine Tucker & Juanjuan Zhang & Ting Zhu, 2009. "Days on Market and Home Sales," Working Papers 09-16, NET Institute, revised Aug 2009.
    • Handle: RePEc:net:wpaper:0916
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    6. Jeong Ho (John) Kim & Kyungmin Kim & Marilyn Pease, 2024. "Unemployment Duration Under Flexible Information Acquisition," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 65(1), pages 471-503, February.
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    8. Aydin, Erdal & Correa, Santiago Bohórquez & Brounen, Dirk, 2019. "Energy performance certification and time on the market," Journal of Environmental Economics and Management, Elsevier, vol. 98(C).
    9. Xin He & Zhenguo Lin & Yingchun Liu & Michael J. Seiler, 2020. "Search Benefit in Housing Markets: An Inverted U‐Shaped Price and TOM Relation," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 48(3), pages 772-807, September.
    10. Nathan Yang, 2011. "An Empirical Model of Industry Dynamics with Common Uncertainty and Learning from the Actions of Competitors," Working Papers 11-16, NET Institute.
    11. Eerola, Essi & Lyytikäinen, Teemu, 2015. "On the role of public price information in housing markets," Regional Science and Urban Economics, Elsevier, vol. 53(C), pages 74-84.
    12. Vrinda Kadiyali & Jeffrey Prince & Daniel Simon, 2014. "Is Dual Agency in Real Estate a Cause for Concern?," The Journal of Real Estate Finance and Economics, Springer, vol. 48(1), pages 164-195, January.
    13. Martel, Jordan, 2018. "Quality, price, and time-on-market," Economics Letters, Elsevier, vol. 171(C), pages 97-101.
    14. Tong Guo & Srinivasaraghavan Sriram & Puneet Manchanda, 2020. "“Let the Sunshine In”: The Impact of Industry Payment Disclosure on Physician Prescription Behavior," Marketing Science, INFORMS, vol. 39(3), pages 516-539, May.
    15. Liang, Cong & Hui, Eddie C.M. & Yip, Tsz Leung, 2018. "Time on market (TOM): The impact of new residential stamp duty," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 503(C), pages 1117-1130.
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    17. Bruce L. Gordon & Daniel T. Winkler, 2017. "The Effect of Listing Price Changes on the Selling Price of Single-Family Residential Homes," The Journal of Real Estate Finance and Economics, Springer, vol. 55(2), pages 185-215, August.

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    More about this item

    Keywords

    Days on Market; Relisting; herding;
    All these keywords.

    JEL classification:

    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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