The accuracy of self-reported dwelling valuation

Tur‐Sinai, Aviad; Fleishman, Larisa; Romanov, Dmitri

doi:10.1016/j.jhe.2019.101660

Cited by 11 publications

(17 citation statements)

References 32 publications

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“…Our findings also reinforce conclusions that reduced home maintenance associated with mortgage default risk may contribute to contagion effects by pulling down nearby property values (e.g., Fisher et al, 2015;Gerardi et al, 2015;Harding et al, 2009). 10 In part, this can occur as undermaintained homes take on a shabbier appearance (Lambie-Hanson, 2015; Towe & Lawley, 9 See, for example, Goodman and Ittner (1992), Kiel and Zabel (1999), Melser (2013) and Tur-Sinai et al (2020), all of whom examine this issue using data from the United States, Australia, and Israel. Additional detail on these studies and our approach to addressing possible concerns about homeowner overassessment of house value are provided later in the paper.…”

Section: Introductionsupporting

confidence: 78%

Forced moves and home maintenance: The amplifying effects of mortgage payment burden on underwater homeowners

Harding

Rosenthal

et al. 2021

Real Estate Economics

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Although well‐known that high current loan‐to‐value ratio (CLTV) is necessary for mortgage default, the amplifying effect of high payment‐to‐income ratios (PTI) that can force families to move has received limited attention. Using the 1985–2013 American Housing Survey panel, we show that high CLTV by itself has little effect on mobility, but high PTI prompts families to move and especially so when CLTV is high. Evidence also indicates that high PTI and CLTV discourage home maintenance. Our estimates suggest that loan modifications that lower PTI will likely be more effective at helping underwater families to remain in their homes and avoid mortgage default as compared to policies that lower CLTV.

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Section: Introductionsupporting

confidence: 78%

Forced moves and home maintenance: The amplifying effects of mortgage payment burden on underwater homeowners

Harding

Rosenthal

et al. 2021

Real Estate Economics

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“…The above hypothesis has been positively verified, among others, by Tur-Sinai et al (2020), who, while researching the housing market in Israel, noticed that owners of properties with air conditioning significantly overestimate their value in comparison to the rest of the respondents. This may result from the fact that the climate in this state is characterised by very high average air temperatures, and therefore having air conditioning may generate higher levels of loss aversion among owners.…”

Section: Drivers Of the Valuation Biasmentioning

confidence: 75%

“…It is therefore critical to identify the extent of the accuracy of self-reported home valuations in the residential property market. In the scientific literature to date, research on the valuation bias in the context of housing has been done, for example, among the United States (US) (Kiel and Zabel, 1999), Mexico (Gonzalez-Navarro and Quintana-Domeque, 2009), Israel (Tur-Sinai et al, 2020), China (Gao and Liang, 2019), Australia (Melser, 2013), the Netherlands (van der Cruijsen et al, 2014) and Philippines (Jimenez, 1982) residents. On this basis, the first research gap can be identified, i.e.…”

Section: Introductionmentioning

confidence: 99%

Drivers behind the accuracy of self-reported home valuations: evidence from an emerging economy

Tomal

2022

JERER

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PurposeThis paper aims to explore the drivers behind the accuracy of self-reported home valuations in the Warsaw (Poland) housing market.Design/methodology/approachIn order to achieve the research goal, firstly, unique data on subjective residential property values estimated by their owners were compared with market-justified ones. The latter was calculated using geographically weighted regression, which allowed for taking into account spatially heterogeneous buyers' housing preferences. An ordered logit model was then used to identify the factors influencing the probability of the occurrence of bias towards over or undervaluation.FindingsThe results of the study revealed that, on average, homeowners overvalued their properties by only 1.94%, and the fraction of interviewees estimating their properties accurately ranges from 20% to 68%, depending on the size of the margin of error adopted. The drivers of the valuation bias variation were the physical, locational and neighbourhood attributes of the property as well as the personal characteristics of the respondents, for which their age and employment situation played a key role.Originality/valueIn contrast to previous studies, this is the first to examine drivers behind the accuracy of self-reported home valuations in a Central and Eastern Europe country. In addition, this work is the first to consider heterogeneous housing preferences when calculating objective property values.

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“…In particular, the results showed that unemployed persons typically overvalued their dwellings, while the immigrants’ valuations were closer to the actual market value of their properties (Tur-Sinai et al 2020 ).…”

Section: Resultsmentioning

confidence: 92%

“…Moreover, anchoring in residential valuations is believed to be one of the factors influencing not only professional assessors’ valuations, but also subjective homeowners’ valuations. The findings of previous research suggest the anchoring of valuations to past evidence and sales transactions has implications for current valuations (Levy and Frethey-Bentham 2010 ; McGreal and Taltavull de La Paz 2012 ; Scott and Lizieri 2012 ; Tur-Sinai et al 2020 ). Therefore, as house purchasing decisions are usually made with little market experience, individuals might “anchor” their valuations to a certain piece of information regarding the housing market, even if it is not up to date or irrelevant.…”

Section: Literature Reviewmentioning

confidence: 95%

Accuracy of Households’ Dwelling Valuations, Housing Demand and Mortgage Decisions: Israeli Case

Koblyakova

Fleishman²,

Furman³

2021

J Real Estate Finan Econ

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Housing policy, as well as academic research, are increasingly concerned with the role of bias in subjective dwelling valuations as a proximate measure of households’ house price expectations and their relationship with housing demand. This paper contributes to this area of study by exploring the possibility of simultaneous relationships between households’ price expectations and incentive to maximise the size of housing services demanded also accounting for the supply side factors and regional perspective. The empirical estimation takes the form of a system of a two simultaneous equations model applying two stage least squares estimation technique. Cross sectional estimations utilise data extracted from the Israeli Longitudinal Panel Survey (LPS) data. Applying the best available proxy for households’ price expectations, calculated as the ratio between subjective dwelling valuations (LPS) and the estimated market value of the same properties, research has identified the interrelated factors that simultaneously influence householders’ price expectations and housing demand. Results offer conceptual and empirical advantages, highlighting the imperfect nature of the housing market, as reflected by the inseparability of bias in subjective valuations and housing decisions.

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The accuracy of self-reported dwelling valuation

Cited by 11 publications

References 32 publications

Forced moves and home maintenance: The amplifying effects of mortgage payment burden on underwater homeowners

Forced moves and home maintenance: The amplifying effects of mortgage payment burden on underwater homeowners

Drivers behind the accuracy of self-reported home valuations: evidence from an emerging economy

Accuracy of Households’ Dwelling Valuations, Housing Demand and Mortgage Decisions: Israeli Case

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