Sale Price Of Properties Research Articles

The Capitalization of School Quality into Renter and Owner Housing

AbstractResidential property amenities including school quality should be capitalized into both rent and property sale prices. Evidence of price and rent premiums for higher school quality is provided. The price premium for school quality for owners exceeds the premium for renters. The premiums paid by renters and owners vary with the likelihood the household directly uses school services, housing market conditions, whether the property is in an urban or suburban area and by the observed school quality in the years leading to the transaction. The larger price premium paid by owners is supported by enhanced liquidity and tempered price volatility for properties located in quality school districts.

The Influence of Urban Landscape Spatial Patterns on Single-Family Property Values.

Many empirical studies assessing the economic benefits of urban green space have continually documented that green space tends to increase both value and sale price of nearby residential properties. Previous studies, however, have not fully captured the quality of neighborhood level landscape spatial patterns on housing prices. To fill this literature gap, this study examined the association between landscape spatial patterns of urban green spaces and single-family home sale transactions using a spatial regression model. The research was conducted through the analysis of 11,326 housing transaction records from 2010 to 2012 in Austin, TX, USA. Variables measuring the structural, locational and neighborhood characteristics of housing were coupled with Geographic Information Systems, remote sensing and FRAGSTATS to calculate several landscape indices measuring the quality of existing landscape spatial patterns. After controlling for any spatial autocorrelation effects, we found that that larger tree and urban forest areas surrounding single-family homes positively contributed to property values, while more fragmented, isolated and irregularly shaped landscape spatial patterns resulted in the inverse. The results of this research increase awareness of the role of urban green spaces while informing community design/planning practices about the linkages between landscape spatial structure and economic benefits.

Transit premium and rent segmentation: A spatial quantile hedonic analysis of Shanghai Metro

When measuring the betterment effect of public transit, most of the existing econometric research tends to use residential property price data and to focus on the conditional mean rather than the conditional variance in terms of the implicit price premium paid for access to public transit. However, because property sale price partly reflects speculation on future capital gains, it sheds little light on the renters' willingness-to-pay for living near public transportation facilities, let alone the variation in rent premium for transit proximity. We in this paper employ a spatial quantile hedonic regression method to gauge the rental impact of metro stations on a large sample of two-bedroom-one-bathroom (2b1b) apartments across 2575 residential complex communities (or “xiaoqu” in mandarin Chinese) in Shanghai, China, as observed between December 2012 and January 2013. We find: a) a community’s geographic adjacency to the nearest Shanghai Metro station tends to correlate positively with the xiaoqu’s average asking rent of 2b1b apartments, indicating a significant rent premium for transit proximity; b) although the transit premium fluctuates across the different rent levels, the variation is statistically insignificant, suggesting no evidence of transit-induced segmentation of the local private residential rental market. Apart from its policy implications, this paper demonstrates a US-China comparative perspective and a novel spatial quantile regression approach to test the segmentation effect of mass transit in a dynamic urban housing market.

Foreclosure, REO, and Market Sales in Residential Real Estate

Assessment of lender and third-party bidder acquired properties at foreclosure auction is provided. Properties acquired at foreclosure auction by third-party bidders transact at a discount to lender dispositions of real estate owned (REO) properties. The discount reflects a reduction in costs associated with lender owned (REO) dispositions and uncertainty faced by third-party bidders. Moreover, there is a ranking in transaction prices among initial purchases by third-party bidders at foreclosure auction, REO sales, non-distressed property sales and the subsequent sales of third-party bidder acquired properties. Third-party bidder auction prices are below REO sale prices, which are below non-distressed property sale prices, which are below the subsequent sale prices of third-party bidder acquired properties. The price spacing by cohort is logical, intuitive and economically justified in a market with rational participants. Implications are also apparent for the measurement of price changes, net sale proceeds and returns to residential real estate.

Statistical Analysis of Effects of Access, Traffic Exposure, and Frontage Parameters on Sale Price of Commercial Real Property in Kansas

Past research has demonstrated the effectiveness of access management in improving or preserving the safety of the traveling public and the capacity and quality of the flow of traffic and supporting and sustaining economic activity. Nevertheless, fear of economic hardship that is perceived to arise from effective implementation of access management remains a barrier to implementation. Work in NCHRP Report 420: Impacts of Access Management Techniques showed how effective access management at the network level preserves or restores the market penetration of commercial activities in a given area. Work done in Florida (1991), Iowa (1997), and Texas (1999) studied the effects of access management retrofits at the corridor level, and found minimal to positive changes in economic activity overall. Small studies of economic impacts on individual sites were conducted in Kansas (1999) and Minnesota (2006), and demonstrated impacts ranging from little to positive on the highest and best use arising from access management retrofits. The site-level (microscopic) studies were of individual corridors or smaller data sets and were largely qualitative analyses of the economic effects of access at the microscopic level. Quantitative analysis is needed on a large data population to examine the factors that most affect the sale price of income-producing properties. This paper presents the effects of access and other transportation characteristics on the sale price of income-producing real property, and a model that shows which variables contribute to sale price, the interactions of those variables, and the effectiveness of the model.

When does delinquency result in neglect? Mortgage distress and property maintenance

Numerous studies have found that foreclosed properties sell at a discount and push down the sale prices of nearby properties, which may be partly driven by poorer maintenance of the foreclosed homes. However, direct evidence of foreclosure-related property neglect has been scarce. This paper uses data on constituent complaints and requests for public services made to the City of Boston to examine the incidence and timing of this type of foreclosure externality. Interior and exterior property conditions appear to suffer most while homes are bank owned, although complaints about reduced maintenance are also common earlier in the foreclosure process.

Modelling the effect of energy performance certificate rating on property value in the Belfast housing market

Purpose – This study aims to investigate the relationship between energy performance and property sale price in the Belfast housing market. How energy efficiency is contributes to sale price and thus appraisal value is of growing concern. The obligatory measurement of energy efficiency in private dwellings seeks to encourage improvements in energy performance. This may be capitalised into property value and may stimulate demand for energy-efficient buildings. However, the relationship between energy performance and property value remains nebulous, complex and under-researched – in part due to data limitations. Design/methodology/approach – Using a hedonic pricing specification, this paper measures the effect of energy performance certificates (EPCs) on residential property value. It examines the relationship between 3,797 residential sales transactions across the Belfast housing market, showing the percentage effect on property value with respect to energy performance. Findings – The results indicate a small but positive relationship between better energy performance and higher selling prices. Nonetheless, the findings point towards strong preference, demand tastes and a complex intra-relationship between EPCs and their capitalisation into property value. Pertinently, the findings point towards any energy-efficient-related price effect affect to be marginal alongside more “quality”-based market behaviours. Research limitations/implications – Analogous with other studies, data deficiencies and a lack of incorporating price determining variables (missing determinants) such as heating type and glazing type introduces omitted variable bias and endogeneity problems within the model structure. Originality/value – This paper contributes to emerging literature and policy debate surrounding the measurement and implementation of energy-efficiency certification through a greater understanding of energy performance characteristics in determining property value.

Does energy efficiency matter to home-buyers? An investigation of EPC ratings and transaction prices in England

This paper investigates whether energy performance ratings, as measured by mandatory Energy Performance Certificates (EPCs), are reflected in the sale prices of residential properties. This is the first large-scale empirical study of this topic in England involving 333,095 dwellings sold at least twice in the period from 1995 to 2012. Applying hedonic regression and an augmented repeat sales regression, we find a positive relationship between the energy efficiency rating of a dwelling and the transaction price per square metre. The price effects of superior energy performance tend to be higher for terraced dwellings and flats compared to detached and semi-detached dwellings. The evidence is less clear-cut for rates of house price growth but remains supportive of a positive association. Overall, the results of this study suggest that energy efficiency labels have a measurable and significant impact on house prices in England.

Valuing water quality in urban watersheds: A comparative analysis of Johnson Creek, Oregon, and Burnt Bridge Creek, Washington

This study uses the hedonic price method to investigate the effect of five water quality parameters on the sale price of single-family residential properties in two urbanized watersheds in the Portland, Oregon-Vancouver, Washington metropolitan area. Water quality parameters include E. coli or fecal coliform, which can affect human health, decrease water clarity and generate foul odors; pH, dissolved oxygen, and stream temperature, which can impact fish and wildlife populations; and total suspended solids, which can affect water clarity, aquatic life, and aesthetics. Properties within ¼ mile, ½, mile, one mile, or more than one mile from Johnson Creek are estimated to experience an increase in sale price of 13.71%, 7.05%, 8.18%, and 3.12%, respectively, from a one mg/L increase in dissolved oxygen levels during the dry season (May–October). Estimates for a 100 count per 100 mL increase in E. coli during the dry season are −2.81% for properties within ¼ mile of Johnson Creek, −0.86% (½ mile), −1.19% (one mile), and −0.71% (greater than one mile). Results for properties in Burnt Bridge Creek include a significantly positive effect for a one mg/L increase in dissolved oxygen levels during the dry season for properties within ½ mile (4.49%), one mile (2.95%), or greater than one mile from the creek (3.17%). Results for other water quality parameters in Burnt Bridge Creek are generally consistent with a priori expectations. Restoration efforts underway in both study areas might be cost justified based on their estimated effect on property sale prices.

Property prices index numbers and derived indices

Purpose – A useful instrument to understand and examine the inner workings of the property trade is devising index numbers of property prices based on historical sequences of market prices. The present work aims at the definition of index numbers of property prices, proposing an innovative methodology compared with what usually recurs in literature. The purpose of this paper is to discuss these issues. Design/methodology/approach – The analysis proposed, based on the mechanisms of formation of stock indices, investigates the analogies between stock and property information, according to the peculiarities of the property trade, leading to a methodology approach, derived from Simple Price Index Method, able to consider possible anomalies in the collected sample of purchase prices, using weighting coefficients based on reliability coefficients of sale prices of properties. Findings – The novel approach proposed has led to the definition of a original methodology useful to appraise property price index numbers and other derived indicators, effective for interpreting and identifying real estate market dynamics in a given area of study, regarded as a standard estimating methodology applicable to any geographical context and kind of property. Practical implications – Methodology proposed in this work is useful to revalue real estate sales price and to consider presence of anomalous sales price in property samples. Originality/value – The calculation of index numbers of prices is usually based on Simple Price Index Methods. Literature shows large use of different methods, such as Repeat Sales Method, Hedonic Price Method, Repeat Value Model. The present work propose an innovative methodology able to detect the presence of possible anomalous market prices in the representative sample, using an appropriate vector of weights in order to take into account the level of reliability of market data.

Relationships between environmental governance and water quality in a growing metropolitan area of the Pacific Northwest, USA

Abstract. We investigate relationships between environmental governance and water quality in two adjacent growing metropolitan areas in the western US. While the Portland, Oregon and Vancouver, Washington metro areas share many common biophysical characteristics, they have different land development histories and water governance structures, providing a unique opportunity for examining how differences in governance might affect environmental quality. We conceptualize possible linkages in which water quality influences governance directly, using monitoring efforts as a metric, and indirectly by using the change in the sale price of single-family residential properties. Governance may then influence water quality directly through riparian restoration resulting from monitoring results and indirectly through land use policy. We investigate evidence to substantiate these linkages. Our results showed that changes in monitoring regimes and land development patterns differed in response to differences in growth management policy and environmental governance systems. Our results also showed similarities in environmental quality responses to varying governance systems. For example, we found that sales prices responded positively to improved water quality (e.g., increases in DO and reductions in bacteria counts) in both cities. Furthermore, riparian restoration efforts improved over time for both cities, indicating the positive effect of governance on this land-based resource that may result in improved water quality. However, as of yet, there were no substantial differences across study areas in water temperature over time, despite an expansion of these urban areas of more than 20 % over 24 years. The mechanisms by which water quality was maintained was similar in the sense that both cities benefited from riparian restoration, but different in the sense that Portland benefited indirectly from land use policy. A combination of long-term legacy effects of land development, and a relatively short history of riparian restoration in both the Portland and Vancouver regions, may have masked any subtle differences between study areas. An alternative explanation is that both cities exhibited combinations of positive indirect and direct water quality governance that resulted in maintenance of water quality in the face of increased urban growth. These findings suggest that a much longer-term water quality monitoring effort is needed to identify the effectiveness of alternative land development and water governance policies.

The Role of Proximity in Foreclosure Externalities: Evidence from Condominiums

We measure the effect of foreclosures on the sale prices of nearby properties using a dataset of condominiums in Boston. A foreclosure in the same association and at the same address depresses the sale price by 2.5 percent, but properties in the same association but located at a different address have an effect that is tightly estimated at zero. Since properties in the same association are close substitutes, we argue that the evidence points against the pecuniary externality of property coming on the market and toward a physical externality as the source of measured foreclosure externalities. (JEL R31)

Valuing green infrastructure in Portland, Oregon

This study uses the hedonic price method to examine if proximity, abundance, and characteristics of green street facilities affect the sale price of single-family residential properties in Portland, Oregon. Different methods for measuring proximity and abundance are explored with distance based on street network, and abundance of green streets at the census tract and census block level, producing statistically significant results. A property's sale price is estimated to increase as distance from the nearest green street facility increases although the magnitude of this effect is small. Facility type does not have a statistically significant effect on a property's sale price, but characteristics such as facility size, proportion of the facility covered by tree canopy, and design complexity are estimated to influence sale price.

A Neural Network based Model for Real Estate Price Estimation Considering Environmental Quality of Property Location

In this paper, a model based on Artificial Neural Network (ANN) has been applied to real estate appraisal. Moreover, an evaluation of ANN performances in estimating the sale price of residential properties has been carried out. Artificial Neural Networks (ANNs) are useful in modelling input-output relationships learning directly from observed data. This capability can be very useful in complex systems like the real estate ones where motivations, tastes and budget availability often do not follow rational behaviours. This study also analyses the impact of such key environmental conditions that represent a problem related to many industrial cities where pollution and landscaping consequences affect the real estate market and residential location choices. We have considered a set of asking price's houses collected in the urban area of Taranto (Italy) where the biggest European steel factory and the 2nd industrial harbour are located.

The Price per Pound and Replacement Cost: The Effects of Q on Office Investment

Despite the reality that price versus replacement cost, or Tobin’s Q, is commonly used in making commercial real estate investment decisions, its efficacy has not been widely explored academically. Nordby and Taylor address this by examining the relationship between Q and office construction starts and pricing trends. By using CoStar property and land transaction sale price data and RSMeans construction cost data from 2000 to 2012, the authors are able to construct comprehensive national and market-level Q indices. The results indicate a strong relationship between Q and investment in office properties. The authors also find that this relationship differs across markets and is generally related to the level of barriers to construction present in these markets. <b>TOPICS:</b>Real estate, in markets, portfolio construction

Assessing the perception and reality of arguments against thermal waste treatment plants in terms of property prices

The thermal processing of waste materials, although considered to be an essential part of waste management, is often sharply contested in the UK. Arguments such as health, depletion of resources, cost, noise, odours, traffic movement and house prices are often cited as reasons against the development of such facilities. This study aims to review the arguments and identify any effect on property prices due to the public perception of the plant. A selection of existing energy from waste (EfW) facilities in the UK, operational for at least 7years, was selected and property sales data, within 5km of the sites, was acquired and analysed in detail. The locations of the properties were calculated in relation to the plant using GIS software (ArcGIS) and the distances split into 5 zones ranging from 0 to 5km from the site. The local property sale prices, normalised against the local house price index, were compared in two time periods, before and after the facility became operational, across each of the 5 zones. In all cases analysed no significant negative effect was observed on property prices at any distance within 5km from a modern operational incinerator. This indicated that the perceived negative effect of the thermal processing of waste on local property values is negligible.

The value of domestic building energy efficiency — evidence from Ireland

Following the transposition of the EU Energy Performance of Buildings Directive into Irish law, all properties offered for sale or to let in Ireland are obliged to have an energy efficiency rating. This paper analyses the effect of energy efficiency ratings on the sale and rental prices of properties in the Republic of Ireland. Using the Heckman selection technique we model the decision to advertise the energy efficiency rating of a property and the effect of energy efficiency ratings on property values. Our results show that energy efficiency has a positive effect on both the sales and rental prices of properties, and that the effect is significantly stronger in the sales segment of the property market. We also analyse the effect of energy efficiency across different market conditions and we find that the effect of the energy rating is generally stronger where market conditions are worse.

Compositional and urban form effects on residential property value patterns in Greater London

The objective of this research is to determine the role of urban street layout design in the process of shaping property values. The effect of spatial accessibility on rent is a classic finding of spatial economics. Using space syntax fine-grained spatial design analysis, which indexes the spatial centrality and accessibility, the patterns of property prices are analysed for a large contiguous sample of over 60 000 residential dwellings in a North London borough, using the council tax band as a proxy variable for the property price. Few studies have examined the effect of spatial contiguity on the housing sub-market classification. The findings demonstrate that the council tax band proxy is a good indicator of residential property sale prices. In addition, a hedonic model framework shows that spatial centrality and accessibility, as indexed by the space syntax spatial design analysis, accounts for the variations in residential property values for single and multiple dwellings when controlling for the property size, relative density and building age. Multivariate analysis is used to establish the weighting of the different variables. The single most important spatial factor is the property size, followed by the ambient density, the local and global spatial accessibility and the building age. Non-residential land use location, the proximity to main arterial roads and the associated traffic and air pollution are shown to inhibit the residential property location.

Is Energy Efficiency Priced in the Housing Market? Some Evidence from the United Kingdom

This paper investigates whether energy performance ratings, as measured by mandatory Energy Performance Certificates (EPCs), are reflected in the sale prices of residential properties. This is the first large-scale empirical study of this topic in the UK involving approximately 400,000 dwellings in the period from 1995 to 2011. Applying hedonic regression and an augmented repeat sales regression, we find a positive relationship between the energy efficiency rating of a dwelling and the transaction price per square metre. The price effects of superior energy performance tend to be higher for terraced dwellings and flats compared to detached and semi-detached dwellings. The evidence is less clear-cut for house price growth rates but remains supportive of an overall positive association. Overall, the results of this study appear to support the hypothesis that energy efficiency levels are reflected in UK house prices, at least in recent years.

List price and sales prices of residential properties during booms and busts

This paper investigates the relationship between the list and sale price of residential properties over the housing cycle. In down or normal markets the list price generally exceeds the sales price; however, when the housing market is strong, homes sell for more than their list price. This observation is not consistent with the assumptions made in the standard model of home sellers’ search behavior. We consider alternative models. In one, sellers set list prices based on their expectations of future changes in sales prices and the arrival rate of buyers; however, demand shocks occur. This model partially explains our data from the Belfast, U.K. housing market, but it fails to predict the list to sales price ratio during a sustained housing boom. We next describe a model where sellers’ endogenously select their search mechanism depending on the strength of the housing market. We find support for the conjecture that sellers switch to an auction-like model during housing booms. There also is evidence that during a downturn in the market, sellers’ list prices are sticky.