Analysis on the Real Estate Market

I found this paper (pdf) while googling for broadband penetration in the Charlottesville area. Paul Ernesto Carrillo’s dissertation entitled “Assessing the Value of On-line Information Using a Two-sided Equilibrium Search Model in the Real Estate Market.” When I have more time (hopefully later today) I will post some of my thoughts on the author’s analysis and conclusions. If you have the time, it is an interesting read. I found myself pulling on more knowledge from my economics classes in college than I had in many years.

One of the assumptions/conclusions with which I disagree is this – Our estimates suggest that, on average, only 3% of the relevant information that home- buyers collect before making a purchase decision is obtained through on-line ads. Furthermore, we use the estimated model to conduct counterfactual experiments and predict how improvements in the information technology affect the average posting price, transaction price, and time until a property is sold. We find that additional online information decreases market prices. (bolding mine)

In practice, I find that more information online is far more likely to attract more potential buyers. The larger the audience (market) the greater possibility for obtaining an acceptable offer. More later …

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