Fire Sales and House Prices: Evidence from Estate Sales Due to Sudden Death

• 成果类型: Article
• 署名作者: Andersen, Steffen; Nielsen, Kasper Meisner
• 署名单位: Copenhagen Business School; Hong Kong University of Science & Technology
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2015.2292
• 发表日期: 2017
• 页码: 201-212
• 关键词: Fire sales; discount; Real estate; financial constraints; Sudden death

摘要

This study investigates when forced sales of real estate turn into fire sales by using a natural experiment that allows us to separate supply and demand effects: Forced sales result from sudden death of house owners and are thus unrelated to current market conditions. We find that forced sales result in fire sale discounts. Discounts increase when the sale is urgent, market conditions are poor, and the seller is financially constrained. Overall, our study identifies when forced sales lead to fire sale discounts, and highlights that fire sales occur even in the absence of temporary demand shocks.