Henry J. Munneke

• University of Georgia

This article conducts a comprehensive analysis of the potential returns from investing in residential real property, with a special interest in any added gains due to trading larger volumes. Since the literature suggests that they are at a bargaining disadvantage, one notable finding is that individuals earn price benefits like so-called profession...

As lot area increases, it is commonly believed that land prices will increase at a non-constant rate. In the case where the land price-area curve increases at a decreasing rate with respect to parcel area, it is believed the cost of subdividing land is the driving factor behind the concavity. This paper uses a unique data set to explore how the are...

This paper examines borrower’s mortgage loan termination behaviors (default and prepayment) by applying a nonparametric spatial model to a traditional loan hazard model. In this spatial hazard model, all of the parameters are allowed, but not forced, to vary across space. This means that borrowers in different locations are allowed to act different...

This study investigates whether mortgage financing regulation unintentionally leads to minorities paying a higher loan contract rate under a risk-based pricing system. We provide evidence that minority borrowers prepay less frequently than comparable non-minority borrowers and thus have lower termination risk. Racially neutral lending policies proh...

This paper provides new evidence of sales sequence-real estate price relations in a setting in which consumption risk and completion risk are both minimized and where agglomeration economies do not pertain. The results illustrate that the monotonic declining price “afternoon effect” or rising price from increasing relative demand documented in auct...

This article examines the bargaining power and information advantages of housing market participants with special interest in the outcomes of individuals compared to real estate agents. Prior studies examining agents’ sales of their own properties find that they obtain higher prices than their clients, which is notable because it suggests a possibl...

The choice of marketing system used to allocate property rights is important across many industries. In Scotland, two systems of marketing real property co-exist: fixed price, where homes are listed for sale at a fixed price on “first-come-first-serve” basis, and offers over, which is a sealed-bid auction format where the seller indicates a floor f...

Using a sample of 30-year fixed-rate subprime mortgage loans, this paper empirically examines whether gender inequality exists in the mortgage market, specifically, whether a borrower's gender affects the loan contract rate charged, beyond the impact of the borrower's probability of default and prepayment. The results, based on a competing-risks lo...

This study draws from the redevelopment, real option, and urban spatial growth literatures to explore the spatial dynamics of the components of house prices. More specifically, the paper proposes that the capitalized value of the option to redevelop housing at the property level can be estimated by incorporating the likelihood of exercising the red...

Comparing agent-owner with agent-represented home sales illustrates that commission contracts lead to external agent moral hazard. Real estate developers are sophisticated sellers who can either use external agents or hire internal agents. The theory shows that neither scheme eliminates agent moral hazard. The empirical study of how the seller-agen...

Within the neighborhood renewal process, property owners and investors attempt to reverse the decline in housing stock quality and correct market obsolescence through redevelopment. However, since the existing improvements can be redeveloped either in part (renovations) or in whole (teardowns), a choice must be made between these two processes. Whi...

Early buyers of single-family residences in newly developed subdivisions assume a greater level of risk than later buyers in choosing to purchase a home in a new subdivision where the market has not been sufficiently established. This risk stems from such things as uncertainty regarding the maintenance of development standards and other negative ex...

This paper examines the effects of quantity restrictions on residential property prices in the presence of neighborhood externalities. A Brigham Young University policy limiting students’ location choices provides a natural experiment for studying the externality and quantity restriction effects on property values. A flexible hedonic model is used...

Looking at a sample of conventional fixed-rate mortgages, this paper examines whether lending practices are consistent with the competitive hypothesis that the racial and ethnic composition of the borrower’s neighborhood affects the contract rate charged only to the extent that these characteristics objectively influence the probability of the loan...

This paper combines an empirical methodology and a theoretical options approach to determine the real option values of development and delay for vacant parcels of land in the City of Chicago. A theoretical options model provides an option price that incorporates future uncertainty. The data allow for disaggregation down to specific land use categor...

The real estate literature largely overlooks the pr ice evolution of similar goods sold sequentially even though such sales often occur wit h new residential and industrial park developments. The law of one price dictates that as sets sold sequentially sell at the same price. Nonetheless, the auction literature argues that cha nges in relative dema...

One of the more interesting characteristics about the real estate brokerage industry is that workers are presented with a choice regarding the sort of compensation scheme under which they want to work. An overwhelming majority of workers choose what is referred to as a commission split scheme in which the salesperson splits any commission that they...

This paper examines the impact of land title systems on property values. The predominant system in the U.S., the recording system, awards title to claimants over current possessors, whereas the Torrens registration system awards title to the current owner. In theory, the registration system maximizes property value, all else equal, but in practice,...

The standard urban model supports the concept of a constant land price gradient throughout the urban area. It is a reasonable conjecture that the land price gradient would vary with direction from the CBD. The variation in the gradient could be caused by a number of factors, but the idea that the land price gradient is flatter along radial transpor...

For point referenced spatial data, we often create explanatory mod-els which introduce regression structure with error consisting of a spa-tial term and a white noise term. Here, we consider more flexible regression structures which allow spatially varying regression coeffi-cients(Gelfand et al 2003). The resulting mean becomes a spatial response s...

This paper examines the influence of bargaining power and property class on the prices of heterogeneous goods. Specifically, it explores the impact of buyer and seller characteristics on the transaction prices of office properties. The empirical model is based on the work of Harding, Rosenthal, and Sirmans ( 2003 ), which developed a method to dist...

In the Case–Shiller repeat-sales housing price index method, the effect of age is embedded into the model's estimates of the time effect. This paper develops a multivariate repeat-sales model that is able to separately control for the effects of age and time, as well as other assets with changing attributes in the construction of price indices. The...

This study empirically examines the role of land prices in the decision to rezone vacant land from one land use to another. Although the study of zoning and related issues is well documented, this is one of only a handful of studies that directly examines zoning changes. Unlike previous studies that treat zoning as static, acknowledging only that t...

Working Draft: This paper is a preliminary working draft. Please do not cite without prior approval from the authors.

TThis paper examines urban land prices within a non-parametric framework with specific interest in the land price gradient with respect to distance from the city center. The land price surface is estimated over a 900-square mile portion of the Chicago metropolitan area and is based on transaction level data of vacant land parcels. The price surface...

The Torrens (or registration) and the recording title systems apply different principles to resolve conflicting claims to land title. This paper develops a theoretical model of how expected title risk and transactions costs affect land value across the two systems and ultimately concludes that the Torrens system leads to higher property values, cet...

This study examines the usefulness of time-varying parameter techniques for constructing reliable transaction-based commercial price indices for metropolitan areas. Time-varying parameter techniques allow the implicit prices of differing quality characteristics to vary intertemporally, overcoming the potential bias imposed by holding implicit price...

This article has two objectives. One is to offer a theoretical model to study how the difference in commission structures affects the performance of agents at full-commission firms (e.g., RE/MAX agents) relative to other agents. The other is to provide an empirical test of the relative performance of full-commission agents. We predict that in equil...

Real estate price indices based solely on samples of sold properties may not accurately represent the population of properties due to potential sample-selection bias. This study addresses this potential for sample-selection bias in the construction of commercial price indices within the context of the Phoenix area office market. The empirical analy...

There is substantial empirical evidence of price concavity in the parcel-size dimension across land-use types and across urban regions. This article examines the degree to which concavity varies between the Central Business District (CBD) and the rest of the urban area. The article provides strong empirical support that the degree of concavity with...

This research explores the impact of mobile home parks on the value of single-family homes. This is the first study that empirically analyzes the effect of mobile home parks on property values. The empirical methodology used attempts to address the potential identification problem that exists within this study; it is possible that mobile home parks...

Conventional wisdom holds that overbuilding and high vacancy, coupled with curtailed tax benefits, have led to reduced office property values since the late 1980s. Yet assertions that office real estate values fell between the mid-1980s and mid-1990s are not supported everywhere by convincing evidence. This study offers a hedonic analysis of Chicag...

The differences in the ownership structures of downtown retail districts and shopping centers may give rise to varying space allocations and rental contracts found in these markets. This article specifically examines the value-enhancing aspects of percentage leases and explores the mechanisms of tenant mix, risk sharing and rent discrimination thro...

The literature’s guidance on appraising easement values is limited, such as the sometimes unworkable advice to locate appropriate comparables. A simple economic analysis involving applications of bargaining theory (splitting a cooperative surplus) and game theory (anticipating other parties’ actions) might provide a viable alternative means of anal...

Rules of thumb have been developed to assist appraisers in dealing with the uncertainties that abound when easement values must be estimated. An economic analysis of one popular rule-of-thumb technique, based on a fixed percentage of the value of a hypothetical fee simple interest in the affected land, reveals that such methodology could not genera...

Recognition of the existence of nonlinear land prices has an impact on the measurement of the rate at which land price declines with distance from the urban center. It is hypothesized that concave parcel prices have given rise to overly large estimates of the rate of price decline with distance, because parcel sizes increase with distance and incre...

The empirical work in this study serves as a test of the principle that redevelopment of a property will occur when the value of the existing bundle, plus demolition costs, is less than or equal to the price of vacant land. The probability of a commercial or industrial property being redeveloped is predicted using the difference in the estimated va...

The purpose of this paper is to determine the impact of economic development programs on the price of single-family residential property. If economic development programs result in the revitalization of the targeted area, one would expect house prices to reflect the effects of economic growth in the area. The early literature in this area is mixed...