Assessing the Performance of Real Estate Auctions
This article investigates the performance of real estate auctions relative to negotiated sales. It uses a repeat-sales methodology to control for unobserved differences in the quality of auction properties. Properties auctioned in Los Angeles during the 1980s boom sold at an estimated discount of 0%-9%, while sales in Dallas following the oil bust obtained discounts of 9%-21%. This evidence is consistent with the theoretical prediction that the auction discount increases in downturns when a seller trades-off a longer expected selling time in a search market against an immediate auction sale. The study finds no evidence of the declining price anomaly. Copyright American Real Estate and Urban Economics Association.
Year of publication: |
1998
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Authors: | Mayer, Christopher J. |
Published in: |
Real Estate Economics. - American Real Estate and Urban Economics Association - AREUEA. - Vol. 26.1998, 1, p. 41-66
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Publisher: |
American Real Estate and Urban Economics Association - AREUEA |
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