The repeat time-on-the-market index

Abstract

We propose two new indices that measure the evolution of the time it takes a home to sell or “time-on-the-market” (TOM). The key features of both indices are a) their ability to control for unobserved heterogeneity exploiting repeat listings, b) their use of censored durations (listings that are expired and/or withdrawn from the market), and c) their computational simplicity. The first index computes proportional displacements in the home sale hazard rate. The second estimates the relative change in median marketing time. The indices are computed using about 1.8 million listings in 15 US urban areas. Results suggest that it is important to account for both censoring and unobserved heterogeneity in measuring housing market liquidity.