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House Price Changes and Idiosyncratic Risk: The Impact of Property CharacteristicsSteven C. BourassaUniversity of Louisville - School of Urban & Public Affairs Donald R. HaurinOhio State University (OSU) - Department of Economics Jessica L. HaurinStanford University Martin HoesliUniversity of Geneva - Graduate School of Business (HEC-Geneva); University of Aberdeen - Business School; Swiss Finance Institute Jian SunUniversity of Louisville - School of Urban & Public Affairs November 2005 FAME Research Paper No. 160 Abstract: While the average change in house prices is related to changes in fundamentals or perhaps market-wide bubbles, not all houses in a market appreciate at the same rate. The primary focus of our study is to investigate the reasons for these variations in price changes among houses within a market. We draw on two theories for guidance, one related to the optimal search strategy for sellers of atypical dwellings and the other focusing on the bargaining process between a seller and potential buyers. We hypothesize that houses will appreciate at different rates depending on the characteristics of the property and the change in the strength of the housing market. These hypotheses are supported using data from three New Zealand housing markets.
Number of Pages in PDF File: 37 Keywords: Atypicality, Bargaining,Housing Risk, House Price Appreciation, Search Models JEL Classification: R31, R21, D83 working papers seriesDate posted: January 3, 2006Suggested CitationContact Information
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