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Days on Market and Home Sales

Authors: Tucker, Catherine - MIT Sloan School of Management
Zhang, Juanjuan - MIT Sloan School of Management
Zhu, Ting - University of Chicago
Issue Date: 2009
Series/Report no.: Net Institute Working Paper;09-16
Abstract: In April 2006, the real estate listing service in Massachusetts adopted a new policy that prohibits home sellers from resetting their property's 'days on market' to zero through relisting. We study the effect of this new policy on single-family home sales along the Massachusetts-Rhode Island border, using homes in Rhode Island, which did not change its policy, as the control group. We find that the policy change leads to a relative sale price reduction of around $11,000 for affected homes in Massachusetts. Homes caught in the middle of the policy change are the hardest hit; the sudden release of the cumulative days on market information lowers the average sale price by $21,500. Sellers respond to the new policy by reducing the listing price to shorten their property's days on market.
Appears in Collections:NET Institute Working Papers Series

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