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Three Essays On Sellers’ Behavior In The Housing Market

Alexandrova, Svetoslava N
http://orcid.org/0000-0001-5067-305X
http://rave.ohiolink.edu/etdc/view?acc_num=csu1491401832832207

Abstract Details

2017, Doctor of Business Administration, Cleveland State University, Monte Ahuja College of Business.
Housing markets exhibit some puzzling behavior that cannot be completely explained by rational market dynamics. The neoclassical economic theory posits that rational sellers and rational buyers in the housing market will look at the current market price in order to determine a value of a property. Studies, however, show that physiological biases may affect the decision- making process of both sellers and buyers. I examine the behavior of sellers in the housing market in three different settings. In essay 1, I analyze the effects of the health of the housing market on mobility. In Essay 2, I study the effects of sellers’ loss aversion on listing price and time on the market within the prospect theory framework. In Essay 3, I focus on identifying stress in the housing market by developing a stress index and commencing the design of an Early Warning System that incorporates signals from the market and behaviors from sellers to indicate increasing levels of pressure. I utilize a data set of private home sale transactions of corporate relocations for the period 2004-2014. The results of the first study from the stepwise logit models on series of economic variables and demographic factors show that relocating employees facing negative equity situations and equity less than 5% of home value have a greater chance of rejecting relocation while economic factors like affordability and credit availability have a positive effect on their ability to move. Essay 2 results indicate that a seller who faces a loss will set up an asking price 5.69 percent higher than they would otherwise. Additionally, sellers facing a loss will experience a reduction in the hazard rate of sale resulting in longer time on the market while income and family status have effect on loss aversion and time on market. In the last essay, I hypothesize that economic signals and home sellers' behaviors can explain the variability of the housing market stress index proxied by a transformed S&P;P500/Case Shiller Index. The preliminary results of the autoregressive models find that housing variables and market expectations of the 'informed sellers' have statistically significant explanatory power.
Alan Reichert, Ph.D. (Committee Chair)
Haigang Zhou, Ph.D. (Committee Co-Chair)
Dieter Gramlich, Ph.D. (Committee Member)
Walter Rom, Ph.D. (Committee Member)
Finance
behavioral finance; housing market; relocation; early warning system; seller behavior; biases; mobility; loss aversion; prospect theory; stress index

Recommended Citations

Citations

  • Alexandrova, S. N. (2017). Three Essays On Sellers’ Behavior In The Housing Market [Doctoral dissertation, Cleveland State University]. OhioLINK Electronic Theses and Dissertations Center. http://rave.ohiolink.edu/etdc/view?acc_num=csu1491401832832207

    APA Style (7th edition)

  • Alexandrova, Svetoslava. Three Essays On Sellers’ Behavior In The Housing Market . 2017. Cleveland State University, Doctoral dissertation. OhioLINK Electronic Theses and Dissertations Center, http://rave.ohiolink.edu/etdc/view?acc_num=csu1491401832832207.

    MLA Style (8th edition)

  • Alexandrova, Svetoslava. "Three Essays On Sellers’ Behavior In The Housing Market ." Doctoral dissertation, Cleveland State University, 2017. http://rave.ohiolink.edu/etdc/view?acc_num=csu1491401832832207

    Chicago Manual of Style (17th edition)

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© 2017, all rights reserved.
This open access ETD is published by Cleveland State University and OhioLINK.