Quality & Time-on-the-Market in Residential Markets

摘要

We empirically examine Taylor's (1999) theoretical prediction that longer time on the market is associated with a perception of lower quality. Our most robust result is from an ordered-logit model that provides evidence that an increase in marketing time is negatively related to property quality. Results from a time on the market duration model indicate that higher quality properties take less time to market and lower quality properties take longer to market relative to a typical property in the sample. We also estimate a probit model that indicates higher quality properties are more likely to sell and lower quality properties are less likely to sell. The empirical results from the models support Taylor's theoretical model predictions that buyers perceive a longer time on the market as a signal of poor quality or the presence of a defect and thus, properties that remain on the market longer have a lower probability of selling.