G. Donald Jud

Real Estate Versus Financial Wealth in Consumption

The consumption function for the U.S. economy is estimated with real estate and financial wealth for quarterly data for 1952:1–2001:4. An additional dollar of real estate wealth increases consumption by 8 cents in the current year, as compared with only 2 cents for financial wealth. The results are consistent with theoretical bounds on the marginal propensity to consume from aggregate wealth. The decline in the stock market during 2000–2001 had a limited impact on aggregate demand in part because of an offsetting real estate wealth effect.

Real Estate Brokers and the Market for Residential Housing

This study explores the role of the real estate broker in the housing market. A model of the demand for broker services by both sellers and buyers is developed and conditional logit estimates are presented. Evidence relating to the effects of the brokerage industry on housing market transactions also is presented. Brokers do not seem to affect the prices of the houses they sell. But they do influence the level of housing consumption by buyers.

Real Estate Brokers, Housing Prices, and the Demand for Housing

This study examines the role of real estate brokers in the market for residential housing. It is shown that brokers obtain higher prices for the homes they sell and implicitly shift part of the brokerage-commission burden to the buyer. Evidence also is found to suggest that buyers who search the housing market with the assistance of a real estate broker have a higher demand for housing than buyers who shop the housing market without the help of a broker. Real estate agents thus appear to be salesmen for the housing industry and to generate effects very similar to that of advertising.

A Further Note on Schools and Housing Values

This paper provides further evidence on the relationship between public schools and housing values. Drawing on data from the Los Angeles and San Francisco areas, the paper presents estimates of an Oates-type model of community housing values. Included in the model are measures of both student achievement and racial composition. The quality of public schooling, as measured by reading achievement, is found to be a strong, statistically significant determinant of community housing values, independent of student racial mix or socioeconomic background. Estimates of the model suggest that changes in achievement scores have substantial impacts on community housing values. Copyright American Real Estate and Urban Economics Association.

The Earnings of Real Estate Salespersons and Others in the Financial Services Industry

This study explores the determinants of earnings of salespersons in financial services using nationwide data from the 1990 U.S. Census. The study reveals that security and insurance salespersons earn substantially more than do persons in real estate sales. The returns to K through 12 schooling are highest in the insurance and securities areas, while the returns to college are highest in security sales. For males, the returns to graduate education are negative in real estate and insurance. For females in these same areas, returns are large and positive in insurance and negative in real estate. In all areas of financial services, earnings are higher in larger, more wealthy, homogenous cities.

Price Spreads and Residential Housing Market Liquidity

Most studies of housing market liquidity have measured liquidity in terms of time on the market (TOM), and have sought to explain TOM in terms of property characteristics and measures of market conditions. This paper departs from past studies of housing market liquidity by examining the spread between the listing and contract prices.We develop theory to explain the price spreads in the residential housing market. The model includes the list price of the home, the cost of the search, the standard deviation of offer prices, and TOM. Empirical tests using 3,597 sales for 25 months show a robust relationship of housing market spreads and these variables. Listing price and cost of search have the predicted positive coefficients, and the standard deviation of price offers is found to be negatively related to the price spread.

Regulation, competition, and abnormal returns in the market for failed thrifts☆

Abstract This study investigates the returns to acquiring-firm stockholders in federally assisted mergers in the savings and loan industry. It is unique in that (a) these mergers are arranged and subsidized by government regulators and (b) they occur in a single industry, one plagued by well-publicized financial difficulties. The contribution of resources by the federal government creates the possibility of wealth transfers from the government to owners of the acquiring firms. We find, consistent with the oversubsidization hypothesis, that shareholders of acquiring firms earn significant positive returns.

Atypicality and the Natural Vacancy Rate Hypothesis

This paper formulates and tests a model of rent change based on the natural vacancy rate hypothesis. It incorporates the Haurin [6] hypothesis in which the natural rate for particular units is determined by their atypicality. Estimates of the model indicate a natural rate of 6.5%. However, the rate is shown to vary systematically across individual units: the more atypical an apartment unit, the higher the natural rate. Copyright American Real Estate and Urban Economics Association.

The Value of a Real Estate Franchise

Franchise affiliation has become common in the real estate brokerage industry. Department of Commerce estimates show that in 1981 about 30% of all real estate brokerage establishments were franchise affiliated. This paper develops and estimates a model of brokerage firm sales, using sample data collected in 1982 for three North Carolina cities. Controlling for the size and experience of the brokerage staff and the experience of the broker, the paper finds that franchise affiliation contributes to firm sales. Affiliation with a national franchise appears to be worth about

Franchising and real estate brokerage

930,000 in additional sales to the average firm. Copyright American Real Estate and Urban Economics Association.