TY  - JOUR
AU  - Genesove,David
AU  - Mayer,Christopher J.
TI  - Equity and Time to Sale in the Real Estate Market
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 4861
PY  - 1994
Y2  - September 1994
UR  - http://www.nber.org/papers/w4861
L1  - http://www.nber.org/papers/w4861.pdf
N1  - Author contact info:
David Genesove
Department of Economics
Faculty of Social Sciences
Hebrew University of Jerusalem
Mount Scopus, Jerusalem 91905  ISRAEL
Tel: 972-2-5883128
Fax: 972-2-5816071
E-Mail: genesove@mscc.huji.ac.il

Christopher J. Mayer
Columbia Business School
3022 Broadway, Uris Hall #805
New York, NY 10027
Tel: 212/854-4221
Fax: 212-932-0545
E-Mail: cm310@columbia.edu
AB  - Recent research has proposed a pro-cyclical link between sales volume and prices in the real estate market through changes in the equity of existing homeowners.  This article uses data from the Boston condominium market to show that owners with high loan-to-value ratios take longer to sell their properties than owners with low loan-to- value ratios.  Properties with high loan-to-value ratios are listed at higher asking prices; when sold, they receive higher prices than units with less debt.  Together, these results are consistent with a search model in which owners 'constrained' by large amounts of debt set a higher reservation price than 'unconstrained' owners, accepting a lower probability of sale in exchange for a higher final sales price.
ER  -