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Darren 🥚 🐣 🕊️ Profile picture
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20 Jul, 15 tweets, 8 min read
1/ Expertise Value Added in the Real Estate Market (Gay, Zhang)

"Realtor activity is correlated with higher-quality listings (based on listing photos/remarks). Controlling for house characteristics, listing quality is correlated with higher sale prices."

papers.ssrn.com/sol3/papers.cf…
2/ "Waller and Jubran find that properties listed by experienced realtors sell for 2% more than those of inexperienced realtors and 32% faster.

"However, Munneke and Yavas find no difference in listing duration between realtors from full-commission firms and other realtors."
3/ "We construct a novel dataset of real estate listings and sales from publicly available data from a major real estate website. This dataset covers a total of 40,049 real estate sales from across Arizona, California, and Illinois.

"We restrict our sample to MLS listings."
4/ Listing quality = (1) number, resolution of photos and (2) the presence of objective ("cherry cabinets") and subjective ("cozy fireplace") descriptions

Realtor activity = total # of sales within a calendar year
Realtor experience = # days licensed (not available in CA & IL).
5/ "More experienced or active realtors may be more likely to represent (owners of) houses of higher quality.

"We partially address this confound using information about transactions where the seller’s realtor (whose expertise we are exploring) worked as a buy-side realtor."
6/ Listing quality is associated with realtor activity but not experience.

"Our measure for experience, time since first acquisition of license, is correlated with age. Older realtors may be less familiar w/ technology and unable to upload a large number of high-quality photos."
7/ "Activity & experience remain significant after controlling for photo quality, suggesting that expertise contributes to sale price in other ways. E.g. experienced realtors may be better negotiators, improve presentation of the house, or possess networks with buyers' realtors."
8/ Column 7: "The coefficient for activity changes; the price ratio coefficient is negative: conditional on observable characteristics, houses listed at lower prices sell for less.

"Realtors w/ large numbers of transactions may list at lower prices to facilitate quicker sales."
9/ "Having more photos is associated with longer time on market.

"Possible explanation: Sellers who post more photos choose to show more characteristics and are likely more confident in those characteristics. The seller might be more patient in waiting for an acceptable offer."
10/ "Using objective qualifiers to describe house characteristics is correlated with higher sale prices on average.

"Including property fixed effects in columns 2-4 controls for the effect of the characteristics’ physical existence & reduces the magnitudes of the coefficients."
11/ "With our full set of controls, having one (two+) characteristic(s) with an objective qualifier is associated w/ a 2.03% (3.83%) increase in sale price.

"Caution regarding further extrapolation: few observations in our sample had 3+ characteristics w/ objective qualifiers."
12/ More:

Misguided Beliefs of Financial Advisors


Financial Advice and Bank Profits


Market for Financial Advice


The Wealthy Renter


Real estate thread
13/ Incentives and Performance in Real Estate Brokerage
14/ Real Estate Agent Remarks: Help or Hype?
15/ Relative Performance of Real Estate Marketing Platforms: MLS Versus Fsbomadison.Com

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More from @ReformedTrader

Darren 🥚 🐣 🕊️ Profile picture
21 Jul
1/ Why We Sleep (Matthew Walker)

"There does not seem to be one major organ within the body or process within the brain that isn’t optimally enhanced by sleep (and detrimentally impaired when we don’t get enough)." (p. 6)

amazon.com/Why-We-Sleep-U… Image
2/ "The physical and mental impairments caused by one night of bad sleep dwarf those caused by an equivalent absence of food or exercise.

"Routinely sleeping less than six hours a night weakens your immune system, substantially increasing your risk of certain forms of cancer.
3/ "It is be linked to your risk of developing Alzheimer’s.

"Inadequate sleep—even moderate reductions for just one week—disrupts blood sugar levels so profoundly that you would be classified as pre-diabetic.
Read 7 tweets
Darren 🥚 🐣 🕊️ Profile picture
21 Jul
1/ Incentives and Performance in Real Estate Brokerage (Munneke, Yavas)

"We predict that the selling price & time it takes to sell through a full-commission (RE/MAX) agent are the same as for a traditional agent. This is supported by empirical results."

link.springer.com/article/10.102… Image
2/ "Full-commission brokerage firms allow agents to retain 100% of commission revenue (minus a 5% franchise fee). In exchange, agents pay a fixed amount each month for desk costs.

"They should therefore have incentives to expend a greater effort than agents of traditional firms.
3/ "Does a full-commission agent generate greater commission revenue by selling a listing faster and at a higher price? Or do these agents not generate a faster selling time or a higher price, but simply spend additional hours that lead to a greater number of listings or sales?
Read 8 tweets
Darren 🥚 🐣 🕊️ Profile picture
20 Jul
1/ Impact of Agent Experience on the Real Estate Transaction (Waller, Jubran)

"Properties listed by veteran agents sell for 2% more than those of less experienced counterparts, do so 32% faster, and with greater probability of a successful transaction."

papers.ssrn.com/sol3/papers.cf…
2/ "Work schedule flexibility and the potential for high income attracts opportunists who may not have made a solid commitment to real estate as a career.

"We define agents who acquired licenses and did not renew at two years (held for >10 years) as rookies (veterans)."
3/ "Properties listed by inexperienced (veteran) agents sell for 10% less (1.8% more) and endure longer marketing durations (sell 32% faster) than those listed by other agents."
Read 7 tweets
Darren 🥚 🐣 🕊️ Profile picture
19 Jul
1/ This month, I took advantage of the opportunity to infect myself with COVID.

This allowed me to control when I quarantine (post-symptoms, necessary meetings must be Zoom/outdoors).

I'm vaccinated but was mildly sick (Jul 10-14).

People express a range of reactions to this.
2/ They are initially shocked, but usually in a good way. ("You're crazy, but I appreciate your trying to protect others.")

Although my quarantine ends on August 1, one vaccinated person insisted on socially meeting outdoors unmasked (and insisted that I not wear one, either).
3/ This makes sense as a signaling mechanism: the risk to him is low, so it's an opportunity for him to impress upon me that freedom and social interaction are important. This wasn't a high-pressure tactic; he genuinely wanted to interact without the discomfort of masks.
Read 6 tweets
Darren 🥚 🐣 🕊️ Profile picture
13 Jul
1/ Understanding Commercial Real Estate: Just How Different from Housing Is It? (Gyourko)

"The correlation between owner-occupied and commercial real estate is 40%. Both exhibit persistence across individual years and mean reversion over longer periods."

papers.ssrn.com/sol3/papers.cf… Image
2/ "The use of common production technologies and factors of production such as land and capital probably makes it difficult to prevent pricing in one property sector from influencing values in another within the same market area."
3/ "The market capitalization of the equity REIT sector was under $7 billion until the early 1990s, so it is only over the last 15-20 years that this market is thought to be a reasonable proxy for commercial property markets. This paper uses data compiled by NAREIT.
Read 17 tweets
Darren 🥚 🐣 🕊️ Profile picture
11 Jul
1/ Maverick (Jason Riley)

"Thomas Sowell’s use of data to test theories and examine social phenomena is a distinguishing feature of his scholarship. The intellectual fads that often animate academics and the media carry little weight with him." (p. 7)

amazon.com/Maverick-Biogr… Image
2/ "Sowell was born in rural North Carolina in 1930 to a family with no electricity or running hot water. His father died before he was born and his mother, a maid, passed away giving birth to his younger brother a few years later.
3/ "The orphaned Sowell was taken in by a great-aunt, who hid from him the fact that he was adopted and had a sister and four brothers. The family relocated, first to Charlotte and later, when Sowell was eight, to New York’s Harlem neighborhood, where he was raised thereafter.
Read 31 tweets

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