Tom: Why Isn't Price Enough?

Abstract

In an efficient market, differences in quality should be fully reflected in differences in prices. This paper examines a highly active residential property market and verifies whether housing attributes can explain time on the market (TOM) after controlling prices. In contrast to the previous literature, only the price ratio and inflation factor are found to be critical in affecting TOM. An interpretation of the results is suggested, along with some directions for future research.

Keywords: TOM, price ratio, inflation factor, physical attribute, time aggregation

JEL Classification: C41, D81, D83, R31