The impact of buyer‐type on house price: Some evidence from the USA

Abstract

Purpose

This paper aims to report the results of a study conducted to determine whether investors systematically pay less for single‐family houses than do buyer/residents.

Design/methodology/approach

Data from 3,443 single‐family house transactions were subjected to regression analysis.

Findings

Investors in this study paid 13.24 percent less, on average, than buyers who reside in the property.

Research limitations/implications

The study was limited to transactions occurring during a single year in one American city. Future research could test whether the results apply in other locations. The study did not consider the influence of seller‐type on transaction price. Future studies could incorporate this facet of the transaction. The results have implications for property tax authorities and fee appraisers because the presence of investors in a housing market may introduce a two‐tiered transaction set which could distort the assessment process and/or the indicated value calculated by fee appraisers using the comparable sales approach.

Originality/value

This paper provides useful information on the impact of buyer‐type on house price.

Citation

Larsen, J.E. (2010), "The impact of buyer‐type on house price: Some evidence from the USA", International Journal of Housing Markets and Analysis, Vol. 3 No. 1, pp. 60-68. https://doi.org/10.1108/17538271011027087