Three Essays in Real Estate Finance
Three Essays in Real Estate Finance

Author: Eren Cifci

Publisher:

Published: 2022

Total Pages: 0

ISBN-13:

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This dissertation covers three essays on real estate finance. The research aims to contribute to the real estate finance literature by exploring the gender earnings difference and social networking effect in the commercial real estate market, and the effects of local housing return on electorates.In the first essay, I expand the literature examining gender dynamics in the labor market, providing the first empirical study focusing specifically on gendered earnings differences in commercial real estate brokerage. We find that the unadjusted observed male agent property sales price premium and shorter marketing times are completely absorbed by property and market attributes. Despite gender performance parity in the sale price and sale time, female agents are involved in significantly fewer property transactions relative to male agents. We document that this gendered outcome is linked to a type of affinity bias known as 0́8homophilic' behavior as buyers and sellers seem to prefer to work with agents of their same gender, thus driving male agent representation.In the second essay, I contribute to real estate network research by investigating the connections between real estate agents' professional social network and their performance. Using the number of followers on agents' LinkedIn profiles as an indicator of social networking, we find that agents with more LinkedIn followers have higher sale prices and transaction volume. The agent benefits of SNS use are robust to market and firm size, as well as agent experience.In the third essay, I evaluate the effects of heterogenous county-level housing market performance on voter behavior in national presidential elections. Consistent with the homevoter" hypothesis, we find that counties with superior house price performance in the four years preceding an election are more likely to "vote-switch" to the incumbent party. Counties with relatively inferior house price performance in the four years leading up to the election are more likely to switch their vote from the incumbent to the challenging party. To our knowledge, this study is the first to investigate and link-local residential real estate performance and national election outcomes.

Three Essays on the Efficiency of Real Esate Markets
Three Essays on the Efficiency of Real Esate Markets

Author: Zhao, Xi

Publisher:

Published: 2015

Total Pages:

ISBN-13:

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The U.S. real estate markets have undergone substantial fluctuations in recent years. This dissertation attempts to understand the effects of some market fundamentals on residential real estate market outcomes and efficiency from both theoretical perspective and empirical evidence. This research contains three research projects. First, a number of papers have identified the positive return of market size on matching outcomes when the market exhibits frictions. In the second chapter, I develop a novel directed search model that connects home list price, reservation price with the sale outcomes and empirically test the thick market effects on trading efficiency in housing market using home transaction data in Dallas metropolitan area during 2006 to 2008. The results present strong and robust market size effects that houses on thicker market are listed and sold at higher prices and significantly faster speed. The third chapter studies principal-agent problems in real estate markets, where the brokerage service is often used to facilitate home sales. The seller agent gets percentage commissions from the home owner and splits with the buyer agent in reward for producing the buyer. A seller agent sometimes serves as dual agent that represents both the seller and buyer sides and gets all commissions. I introduce a theoretical model and present evidence from Dallas metropolitan housing market that the agency structure may create principal-agent problems. I find that the dual-agent-assisted home sales on average give 2.6% more discount on final price than home sales that are assisted by two agents. Competition among home buyers may reduce the severity of principal-agent problems. The fourth chapter deviates from the rational agent assumption and investigates the behavioral impacts of price endings on home sales. Recent literature in behavioral economics suggests that price endings have some psychological impacts on buyer's purchasing decision. In real estate markets, both round price and precise price (or nine ending price) strategies are used in home sales. From the panel data and regression discontinuity analysis of Dallas housing market transactions, I find homes listed with precise price are on average sold at 4.6% higher price than homes listed at round price only when prices are less than their nearby round prices, favoring the nine ending price literature. The electronic version of this dissertation is accessible from http://hdl.handle.net/1969.1/155741

Three Essays in Real Estate Finance
Three Essays in Real Estate Finance

Author:

Publisher:

Published: 2013

Total Pages: 175

ISBN-13:

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This thesis is a continuation to a large research agenda investigating how market frictions affect residential and commercial real estate markets and offers a more comprehensive study on two recent observations in U.S.: the foreclosure spillover effect in residential housing market and the increased Real Estate Investment Trusts (REITs) return volatility in commercial real estate market. Central to the concerns about the tremendous foreclosure wave since 2006 is that such incidents may impose negative externalities on neighborhood properties, and on the wider community. A large literature has documented that a foreclosed home depresses neighboring property prices. However, few studies attempt to explain why such a contagion effect exists. Utilizing a novel capital expenditure dataset and an improved test design, I demonstrate that foreclosures spread over through the following channels: (1) individual homeowners cut capital expenditures when home prices fall and the likelihood of foreclosure increases, which results in a lower neighborhood amenity; (2) the reduction in capital expenditure generates a negative externality by providing other homeowners a disincentive to spend money on home improvement; (3) under-investment deteriorates home quality and brings down home prices; and (4) the decline in property prices further worsens the under-investment problem and completes a feedback loop. To understand the exacerbated REITs return volatility, I use the following two new approaches. The first approach investigates the impact of asymmetric transaction costs on return dynamics in public and private real estate markets and validates model propositions with simulation and empirical tests. It proposes that trading volume moving from private market to listed market and more volatile underlying asset value at down time contribute to high volatility. The second approach studies the impact of firm level economic activities, financial leverage and market risk on REITs volatility, using U.S equity REITs data from 1995 to 2009. The findings uncover the following channels for recent increase in REIT return volatility: (1) REITs firms become more leveraged over time; (2) REITs' beta values and market return volatility increase in the crisis; (3) Economic activities, such as cash flow news and discount rate news, positively affect REIT return volatility. Among these factors, increasing beta is the most influential contributor.