Abstract
The housing literature largely overlooks the price evolution of similar assets sold sequentially, even though such sales often occur with new residential developments. The law of one price implies no persistent price pattern for identical assets sold sequentially. Nonetheless, the auction literature argues that changes in relative demand over the sales sequence and the reduction in valuation risk as later buyers use previous sales to validate asset values can lead to sales sequence effects on prices. The non-auction literature emphasizes rising prices from declining consumption risk as new housing subdivisions are built out. This paper examines the price evolution in the condominium market where similar units are sold sequentially in a setting with minimal consumption risk. While we find statistically significant sequence-price effects that vary across sales phases and how quickly the development sells out, none are economically significant. We conclude that there appears to be no pervasive sequence-price relationship for sequential sales of similar property units.
Published Version
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