An Analysis of the Price Formation Process at a HUD Auction

Allen, Marcus T.; Swisher, Judith

doi:10.1080/10835547.2000.12091039

Cited by 44 publications

(22 citation statements)

References 9 publications

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“…This is certainly true from the majority of studies to have considered the United Sates (e.g. Allen and Swisher, 2000; Mayer, 1995, 1998). Mayer (1995) argues that as vendors selling privately are not time constrained they can wait longer in order to find a buyer more matched in terms of price.…”

Section: Auction Literature and Housing Assetsmentioning

confidence: 92%

The probability of sale and price premiums in withdrawn auctioned properties

Stevenson

Young

2014

Urban Studies

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This paper examines the impact of the auction process of residential properties that whilst unsuccessful at auction sold subsequently. The empirical analysis considers both the probability of sale and the premium of the subsequent sale price over the guide price, reserve and opening bid. The findings highlight that the final achieved sale price is influenced by key price variables revealed both prior to and during the auction itself. Factors such as auction participation, the number of individual bidders and the number of bids are significant in a number of the alternative specifications.

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Section: Auction Literature and Housing Assetsmentioning

confidence: 92%

The probability of sale and price premiums in withdrawn auctioned properties

Stevenson

Young

2014

Urban Studies

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“…Lusht (1996) further pointed out that English auctions maximise revenues with risk-neutral bidders and affiliated valuations, while sealed-bid auctions maximise revenues with risk-averse bidders and independent valuations. Several empirical studies focused on comparing the performance of auctions to private negotiations (Allen and Swisher, 2000; Dotzour et al, 1998; Lusht, 1996; Mayer, 1995, 1998).…”

Section: Local Government Behaviour In the Beijing Land Marketmentioning

confidence: 99%

Land leasing and local government behaviour in China: Evidence from Beijing

et al. 2014

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Since 2004, two auction mechanisms – listing auctions and tender auctions – have played a dominant role in land lease arrangements for real estate development in Beijing. Listing auctions in land markets are similar to general English auctions, where bidders offer the highest price to win. However, in tender auctions, winners are determined by the bidding price and the bidder’s financial capability and reputation. Based on granted land parcels from 2006 to 2012 in Beijing, this paper attempts to examine the price differences between the two auctions and the role of land auction in urban development and price stabilisation. We find that land policy in Beijing, which aims to stabilise land prices and to provide low-price residences, has been integrated with urban development planning in terms of spatial and density pattern. Land leasing in Beijing is not only a land policy but also a part of the strategy framework of local development.

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“…The foregoing observations were also confirmed in New Zealand (Dotzour et al , 1998), USA (Mayer, 1998; Allen and Swisher, 2000), Sweden (Eklof and Lunander, 2005) and recently in Singapore (Ong, 2006). Dotzour.…”

Section: Review Of Literaturementioning

confidence: 60%

“…The majority of those researches focused on the price formation process, comparing sales from different auctions to revenue from private negotiations (Dotzour. et al , 1998; Mayer, 1995; 1998; Allen and Swisher, 2000; Eklof and Lunander, 2005; Ong, 2006). A number of auction research work also concentrated on the determinants of auction success (Burns., 1985; DeBoer.…”

Section: Introductionmentioning

confidence: 98%

Price formation in residential property market: evidence from FGLP auction in Nigeria

Amidu

Aluko²,

Oyedele³

2008

Property Management

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PurposeA significant number of published empirical studies of real estate auctions abound in real estate literature. These studies focus on the auction price formation process through the comparison of sales from different auctions to revenue from private negotiations. While these studies have made useful contributions to the literature, they are largely confined to data emanating from auctions in the UK format. Other auction formats have been virtually ignored; thus creating a gap in the literature. This study, therefore seeks to extend research in the auction price formation process through an empirical analysis of transaction prices from the perspective of another auction format: first sealed bid auction.Design/methodology/approachThe data for this study consist of a sample size of 120 residential properties sold at auction of the Federal Government Landed Properties (FGLP) in Ikoyi, Lagos, Nigeria. Transaction data for each of the sampled properties were compiled from Vol. 11, No. 3834 of Thisday newspaper. These include open market values (reserve prices), bid prices, numbers of bids, property specific and bidders' attributes. These were then analysed using descriptive, paired t‐test statistic and regression model.FindingsThe empirical evidence suggests that auction properties sell at an 11.33 per cent premium relative to predicted market values. Also provided, through the regression model, are variables having a significant impact on the auction prices.Originality/valueThe paper provides empirical evidence of the auction price formation process in first sealed bid auction where published empirical studies are still relatively few. Overall, the results of the analysis presented suggest that auctions offer an optimal method of selling property.

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An Analysis of the Price Formation Process at a HUD Auction

Cited by 44 publications

References 9 publications

The probability of sale and price premiums in withdrawn auctioned properties

The probability of sale and price premiums in withdrawn auctioned properties

Land leasing and local government behaviour in China: Evidence from Beijing

Price formation in residential property market: evidence from FGLP auction in Nigeria

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