Measuring Price Behavior in New Residential Subdivisions

Posted: 12 Aug 2013 Last revised: 21 Aug 2013

See all articles by Harris Hollans

Harris Hollans

Auburn University - College of Business

Richard W. Martin

University of Georgia - Department of Insurance, Legal Studies, Real Estate

Henry J. Munneke

University of Georgia - Department of Insurance, Legal Studies, Real Estate

Date Written: August 12, 2013

Abstract

Early buyers of single-family residences in newly developed subdivisions assume a greater level of risk than later buyers in choosing to purchase a home in a new subdivision where the market has not been sufficiently established. This risk stems from such things as uncertainty regarding the maintenance of development standards and other negative externalities inherent in purchasing in the early stages of the development cycles. Because of this, early buyers may require lower prices to compensate them for the additional risk that they assume. This paper explores the evolution of the price of residences in newly developed single-family subdivisions through the phases of development.

Keywords: Housing markets, Subdivisions, Development sequence, Price structures

JEL Classification: R31, R32

Suggested Citation

Hollans, Harris and Martin, Richard W. and Munneke, Henry J., Measuring Price Behavior in New Residential Subdivisions (August 12, 2013). Journal of Real Estate Finance and Economics, Vol. 47, No. 2, 2013. Available at SSRN: https://ssrn.com/abstract=2309029

Harris Hollans

Auburn University - College of Business ( email )

Department of Finance
303 Lowder Business Bldg.
Auburn University, AL 36849
United States
(334) 844-3009 (Phone)
(334)844-4960 (Fax)

Richard W. Martin

University of Georgia - Department of Insurance, Legal Studies, Real Estate ( email )

Athens, GA 30602-6254
United States

Henry J. Munneke (Contact Author)

University of Georgia - Department of Insurance, Legal Studies, Real Estate ( email )

Athens, GA 30602-6254
United States
(706) 542-0496 (Phone)
(706) 542-4295 (Fax)

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