Real Estate Home Pricing: The Role of Hedonic model variables and Community Amenities
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Authors
Dorr, Timothy G.
Issue Date
2016-04-01
Type
Presentation
Language
en_US
Keywords
Real estate , Home pricing , Hedonic model , Community amenities , Tax liability
Alternative Title
Abstract
Although the residential real estate market has stabilized in the five -- seven years following the financial crisis of 2008 the market remains generally depressed with price growth stagnant. In turn forecasting an initial asking price using traditional hedonic pricing models is problematic: buyers have lost confidence in the market’s response. Additionally, community amenities may be viewed by buyers as a potential tax liability given reduced availability of federal and state funding for local services. As originally suggested variables such as the square footage of a property can be used to explain changes in the selling prices of homes in these markets. The findings for question two were not anticipated. It would appear that high levels of community services are attractive to home buyers in this county. If we consider the three towns, there may be variables that create attractiveness other than services and square footage. These differences may be masking another variable that has a higher explanatory value in relation to the variance observed in selling prices of homes in these communities.