The Price–Time-on-Market Puzzle Revisited: Evidence from Big Data
30 Pages Posted: 4 May 2021 Last revised: 20 Jul 2021
Date Written: June 1, 2021
This paper provides new evidence on the relationship between time-on-market (TOM) and house prices. Using big data techniques, we construct a rich dataset on residential transaction prices in England between 2018 and 2020, their listing information, energy performance, and property taxes. We use two novel instrumental variables (IVs) – the price revision duration and the council tax band for TOM and price respective. We show a positive and simultaneously determined relationship between price and TOM, in line with search theory. We also demonstrate that sellers not looking to use the proceeds from the sale as a down-payment for a new property, i.e. ’chain-free’ sellers, list and transact at a lower price, all else equal.
Keywords: Time on market, TOM, house price, 2SLS, chain-free, big data.
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