Abstract
More and more families choose to buy the second-hand houses as their first house. Due to a high demand in second-hand housing market, there is a continuously rising trend in the price of second-hand houses. This article mainly focus on the valuation of second-hand housing in Chinese market, based on the binomial option pricing model. Besides valuing the second-hand houses as the American-style options, the time value is another important element in the pricing model. Based on the defined pricing model, the result of empirical analysis is that the estimation of current housing price has a difference from the actual transaction prices to some extent. It can be concluded that the current price of second-hand houses in Chinese market is far from reflecting the time value, and the time value of the second-hand houses is unable to be ignored in the future. It is hoped that there will be a more precise way to measure the value of time in the second-hand housing market specifically.
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