Evaluating Different Housing Prices: Marketing and Financial Distortions
Author
Start Page / End Page
Volume
Issue Number
Year
Publication
Josep Maria Raya
549 / 576
24
4
2021
International Real Estate Review
Abstract
The aim of this paper is to evaluate the importance of housing price. We compare the evolution of three different types of housing prices (list, sale and appraisal prices). The objective is to see the marketing and financial consequences of using each type of housing price. To do this, a dataset of a real estate company and its financial intermediary with all of these types of housing prices is used. We estimate econometric models in which the dependent variables are: price (appraisal, selling or list), mark-up, loan to value and foreclosures. The results show evidence of the consequences of using a specific housing price in terms of inflation calculation, financial assets, and collateral valuation and mortgage default, among others.
Keywords
Housing prices, appraisal prices, selling prices, markup, default, left-digit bias, inflation, overappraisal, evaluation.