Market Structure in the Residential Real Estate Brokerage Market

This study provides empirical evidence regarding brokerage firm concentration in a local market multiple listing service setting over the year 1992-1995. To evaluate the level of brokerage firm concentration in this market, Gini Coefficients, Herfindahl-Hirschman Indices and Concentration Ratios for each year of the study period are calculated. Our results indicate that for firms responsible for listing properties, firm concentration has not varied substantially over the four-year study period. However, for those firms that were responsible for actually selling properties, firm concentration has decreased over the study period. This finding tends to indicate that the MLS now provides greater exposure to a wide variety of sales firms, therefore leading to a higher level of competition with a lower level of concentration for selling firms in this local market.

Effect of Foreclosure Status on Residential Selling Price

Real estate professionals believe that foreclosed houses sell at a discount. This article empirically investigates whether foreclosed houses sell at a discount. A sample of 2,482 residential transactions in Arlington, Texas, is used in a hedonic pricing model to test this hypothesis. The results indicate that foreclosed properties sold at a 23% discount.

Implicit Liquidity Premiums in the Disposition of RTC Assets

The Resolution Trust Corporation (RTC) was created by congressional legislation passed in 1989, and was charged with, among other things, the orderly disposition of other real estate owned (OREO) property. Questions have been raised about how efficient and effective the RTC has been in achieved its congressional mandate. One of the issues resulting from the efficiency question involves the amount of discount the RTC realizes for a quick disposition of the property. This study utilizes data provided by the RTC concerning its sales to analyze the implicit liquidity premium resulting from disposing of OREO. The results of the study indicate what variables contribute to liquidity premiums. This paper's importance relies most heavily on the finding that realistic market adjustments in regulation, over time, helped to achieve a higher degree of liquidity for RTC real estate property sales. The findings of this paper confirm the legislative intent of FIRREA, which is to ensure that real estate properties acquired by the government are disposed of at the highest dollar value possible.