Transcript eres2010_096.content

An analysis of Time On Market and
Advertised to Sale Price Differences
OVER TIME
Peter Rossini*, Valerie Kupke, and Paul Kershaw
University of South Australia
&
Stanley McGreal
University of Ulster & University of South Australia
European Real Estate Society Conference
Milano, Italy, 23-26 June 2010
Introduction
• TOM measure of the buoyancy of the REmarket.
• This preliminary study uses data from 24 quarters
from 2003 to 2008.
• 77,176 observations - over 55% of all market
transactions of detached residential properties
• Data combines transaction records with details of
property marketing data from RPData.
• Use TOM and first to last advertised price and
across the different locations and for each
property type.
Time on Market Indicators for Adelaide, South Australia
Slide 2
Changing TOM Distributions
Time on Market Indicators for Adelaide, South Australia
Slide 3
Median TOM over time
Time on Market Indicators for Adelaide, South Australia
Slide 4
Median TOM &
% Change Price
Chart of Median TOM and % Change in Median Price
50
8.00%
Correlation =-.789
6.00%
35
5.00%
30
4.00%
25
3.00%
20
2.00%
15
1.00%
10
0.00%
Median TOM*
5
-1.00%
* Authors Research
** ABS Establish House Price Index (Adelaide)
Time on Market Indicators for Adelaide, South Australia
2008Q4
2008Q3
2008Q2
2008Q1
2007Q4
2007Q3
2007Q2
2007Q1
2006Q4
2006Q3
2006Q2
-2.00%
2006Q1
2005Q4
2005Q3
2005Q2
2005Q1
2004Q4
2004Q1
2003Q4
2003Q3
2003Q2
2003Q1
2004Q3
% Change House Prices**
0
% Change in Median Price
7.00%
40
2004Q2
Days on Market
45
Quarter
Slide 5
TOM by
Year and Region
Year
Region
Total
2008
2007
2006
2005
2004
2003
Central
15
22
22
22
22
29
22
Western
15
22
36
29
23
29
23
Coast
15
22
36
29
23
29
24
South Western
15
22
22
22
20
26
22
South Eastern
15
22
29
28
22
33
23
Inner Northern
15
22
36
29
22
29
23
North Eastern
8
22
36
31
22
37
25
Northern
8
29
50
50
31
45
36
15
30
50
43
32
43
35
8
27
36
30
21
34
26
15
22
36
35
22
35
28
Hills
Southern
Total
Time on Market Indicators for Adelaide, South Australia
Slide 6
TOM by Region
Median TOM – Houses 2003
Median TOM – Houses 2008
45
8
15
15
15
15
8
29
29
15
29
15
26
15
8
Time on Market Indicators for Adelaide, South Australia
37
29
33
43
34
Slide 7
TOM by Year and
# Main Rooms
Year
Main Rooms
2003
2004
2005
2006
2007
2008
Total
3
15
16
36
28
23
43
23
4
15
22
29
29
22
30
22
5
8
22
35
29
21
32
22
6
15
22
37
36
22
35
28
7
15
29
43
37
27
37
29
8
15
30
43
43
36
47
36
Total
15
22
36
35
22
35
28
Time on Market Indicators for Adelaide, South Australia
Slide 8
Hazard Model
Year, Regions, Rooms, Land Area
Omnibus Tests of Model Coefficients a,b
Overall (score)
-2 Log Likelihood
1553246.123
Chisquare
df
Sig.
7116.479
20
.000
Change From Previous Step
Chisquare
df
Sig.
Change From Previous Block
Chisquare
df
Sig.
6192.208
6192.208
20
.000
20
.000
Variables in the Equation
B
SE
SALES.Year
Wald
df
Sig.
5066.966
5
.000
Exp(B)
SALES.Year(1)
.830
.014
3360.802
1
.000
2.294
SALES.Year(2)
.198
.012
253.100
1
.000
1.219
SALES.Year(3)
-.075
.012
36.592
1
.000
.928
SALES.Year(4)
-.058
.012
22.943
1
.000
.943
SALES.Year(5)
.168
.012
197.472
1
.000
1.183
893.319
5
.000
ROOMSCat(1)
.251
.052
23.434
1
.000
1.285
ROOMSCat(2)
.311
.018
300.658
1
.000
1.365
ROOMSCat(3)
.329
.012
739.585
1
.000
1.390
ROOMSCat(4)
.220
.013
294.972
1
.000
1.246
ROOMSCat(5)
.122
.014
1.130
ROOMSCat
SALES.Region
73.190
1
.000
773.078
9
.000
SALES.Region(1)
.040
.016
6.150
1
.013
1.040
SALES.Region(2)
-.026
.014
3.352
1
.067
.974
SALES.Region(3)
-.041
.016
6.123
1
.013
.960
SALES.Region(4)
.154
.017
85.468
1
.000
1.166
SALES.Region(5)
.024
.017
2.036
1
.154
1.025
SALES.Region(6)
-.031
.017
3.174
1
.075
.969
SALES.Region(7)
-.007
.013
.315
1
.575
.993
SALES.Region(8)
-.202
.011
329.368
1
.000
.817
SALES.Region(9)
-.245
.027
81.317
1
.000
.783
.090
.069
1.727
1
.189
1.094
LandArea
Time on Market Indicators for Adelaide, South Australia
Slide 9
Hazard Model
Year, Regions, Rooms, Land Area
Time on Market Indicators for Adelaide, South Australia
Slide 10
Using Hazard Models
to develop an index
• Two methods used to estimate this index.
• 1 - single Cox regression (hazard model) is
estimated - dummy variables or each quarter
with region, main rooms and land area
• 2 - series of Cox regressions with two quarters
of data and one dummy to indicate the change
with region, main rooms and land area.
• Index created from the odds-ratios – from the
exponents of the coefficients.
Time on Market Indicators for Adelaide, South Australia
Slide 11
TOM index based on median and
hazard model results
TOM index based on Median, Single Cox
and multiple Cox Regression models
3.5
3.0
Medain TOM
2.5
2.0
1.5
Median TOM*
Multiple Cox
1.0
Single Cox
0.5
2003Q1
2003Q2
2003Q3
2003Q4
2004Q1
2004Q2
2004Q3
2004Q4
2005Q1
2005Q2
2005Q3
2005Q4
2006Q1
2006Q2
2006Q3
2006Q4
2007Q1
2007Q2
2007Q3
2007Q4
2008Q1
2008Q2
2008Q3
2008Q4
0.0
Quarter
Time on Market Indicators for Adelaide, South Australia
Slide 12
Plot of hazard model
odds/ratios over time
1.600
1.400
1.200
4 Rooms
5 Rooms
1.000
.800
.600
6 Rooms
7 Rooms
.400
.200
8 or more
Rooms
.000
Time on Market Indicators for Adelaide, South Australia
Slide 13
Plot of hazard model
odds/ratios over time
1.600
1.400
1.200
Western
Coast
South Western
1.000
South Eastern
Inner Northern
North Eastern
.800
Northern
Hills
.600
Southern
.400
Time on Market Indicators for Adelaide, South Australia
Slide 14
First to Last Advertised
price over time
First to Last Advertised Price Change
20000.00
8.00%
7.00%
10000.00
.00
Price Difference
5.00%
-10000.00
4.00%
-20000.00
3.00%
2.00%
-30000.00
1.00%
-40000.00
%Change in House Price
6.00%
0.00%
-1.00%
2008Q4
2008Q3
2008Q2
2008Q1
2007Q4
2007Q3
-2.00%
2007Q2
2007Q1
2006Q4
2006Q3
2006Q2
2006Q1
2005Q4
2005Q2
2005Q1
2004Q4
Percentile 05
% Change House Prices**
2004Q3
2004Q2
2004Q1
2003Q4
2003Q2
2003Q1
-60000.00
2003Q3
Percentile 95
Median
2005Q3
-50000.00
Quarter
Time on Market Indicators for Adelaide, South Australia
Slide 15
First Advertised to actual
sale price over time
First Advertised to Sale Price Change
100000.00
8.00%
Percentile 95
Percentile 05
Median
% Change House Prices**
60000.00
7.00%
6.00%
5.00%
Price Difference
40000.00
%Change in House Price
80000.00
4.00%
20000.00
3.00%
.00
2.00%
-20000.00
1.00%
-40000.00
0.00%
2008…
2008…
2008…
2008…
2007…
2007…
2007…
2007…
2006…
2006…
2006…
2006…
2005…
2005…
2005…
2005…
2004…
2004…
2004…
2004…
2003…
-2.00%
2003…
-80000.00
2003…
-1.00%
2003…
-60000.00
Quarter
Time on Market Indicators for Adelaide, South Australia
Slide 16