Time on Market and the Cash Discount for Condos
We investigate whether the cash discount for condos is affected by time on market (TOM). Theoretically and empirically, we show that the cash discount has two components: First, condos purchased with cash sell at a discount compared to mortgage-financed condos, which is in line with the cash discoun...
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| Veröffentlicht in: | The journal of real estate finance and economics 2024-02, Vol.68 (2), p.188-217 |
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| container_title | The journal of real estate finance and economics |
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| creator | Beracha, Eli Freybote, Julia Lin, Zhenguo Seiler, Michael J. |
| description | We investigate whether the cash discount for condos is affected by time on market (TOM). Theoretically and empirically, we show that the cash discount has two components: First, condos purchased with cash sell at a discount compared to mortgage-financed condos, which is in line with the cash discount identified in the housing literature. The second component is a TOM-variable cash discount that increases the longer a condo is on the market. In addition, our empirical analysis suggests the cash discount only exists for low-price condos and disappears in higher price segments. In particular, for low-price condos, the cash discount comprises of a 9.42% fixed cash discount and 0.1% per day TOM-variable cash discount. Our results suggest TOM represents an additional explanation for the cash discount in condos and moderates the relation between cash purchase and sales price. |
| doi_str_mv | 10.1007/s11146-022-09913-0 |
| format | Article |
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| subjects | Condominiums Discounts Economics Economics and Finance Financial Services Housing Housing prices Purchasing Real estate sales Regional/Spatial Science Sales Single family |
| title | Time on Market and the Cash Discount for Condos |
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