List Price Information in Residential Appraisal and Underwriting

Posted: 2 Sep 1998

See all articles by John R. Knight

John R. Knight

University of the Pacific - Eberhardt School of Business

C. F. Sirmans

Florida State University - Department of Risk Management, Insurance, Real Estate & Business Law

Geoffrey K. Turnbull

Georgia State University - Department of Economics

Abstract

This article examines the usefulness of listing prices as leading indicators of house values and as predictors of the direction of housing markets. With Multiple Listing Service data from a large metropolitan area, we create two price indexes, using first listing price and then selling price as the dependent variable in the hedonic regressions. The market is then geographically and categorically segmented, and Granger causality tests are performed to analyze the leading aspect of list prices in the list price sales price relationship. We find that different segments of the market perform quite differently over the time period of our study, suggesting that for data based appraisal purposes care is needed in determining the manner and level of aggregation. We also find, however, that market list prices continue to convey important information about subsequent selling prices in most market segments.

JEL Classification: G14

Suggested Citation

Knight, John Ross and Sirmans, C. F. and Turnbull, Geoffrey K., List Price Information in Residential Appraisal and Underwriting. Available at SSRN: https://ssrn.com/abstract=120868

John Ross Knight (Contact Author)

University of the Pacific - Eberhardt School of Business ( email )

3601 Pacific Avenue
Stockton, CA 95219
United States
209-946-2637 (Phone)
209-946-2586 (Fax)

C. F. Sirmans

Florida State University - Department of Risk Management, Insurance, Real Estate & Business Law ( email )

Tallahasse, FL 32306
United States
850 644-4076 (Phone)

HOME PAGE: http://www.cob.fsu.edu/rmi

Geoffrey K. Turnbull

Georgia State University - Department of Economics ( email )

P.O. Box 3992
Atlanta, GA 30302-3992
United States
404-651-0419 (Phone)
404-651-2737 (Fax)

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