Identifying Behavioral Explanations for a Subset of the Real Estate Shadow Market

Posted: 22 Jun 2011

See all articles by Mark Lane

Mark Lane

affiliation not provided to SSRN

Michael Seiler

College of William and Mary - Finance

Vicky L. Seiler

Johns Hopkins University

Date Written: June 20, 2011

Abstract

This study examines both financial and behavioral explanations for the existence of a residential real estate shadow market for underwater investment properties. We find that the affordability constraint explains only 44.4% of the reasons not to list a property for sale. Three documented behavioral reasons primarily drive the remaining decisions. While various investor demographic characteristics are at times significant, no distinct profile emerged to identify those most likely to reside in this portion of the shadow market.

Keywords: shadow market, familiarity bias, false reference points, status quo deviation aversion, behavioral real estate

Suggested Citation

Lane, Mark and Seiler, Michael and Seiler, Vicky L., Identifying Behavioral Explanations for a Subset of the Real Estate Shadow Market (June 20, 2011). Journal of Housing Research, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1868601

Mark Lane

affiliation not provided to SSRN ( email )

Michael Seiler (Contact Author)

College of William and Mary - Finance ( email )

VA
United States

HOME PAGE: http://mason.wm.edu/faculty/directory/seiler_m.php

Vicky L. Seiler

Johns Hopkins University ( email )

Baltimore, MD 20036-1984
United States

Register to save articles to
your library

Register

Paper statistics

Abstract Views
262
PlumX Metrics