Applying Property Pricing Models to Estimate a Foreclosure Discount in the Hotel Real Estate Sector

This study investigates the magnitude of the foreclosure sale discount in the hotel sector. The foreclosure sales discount is captured using three different models: hedonic, hybrid, and repeat sales. Controlling for various hotel attributes and time, the hedonic model shows a foreclosure discount of 40%, followed by the repeat sales model at 42% and the hybrid model at 45%, all relative to non-distressed market prices. The results of the study provide novel empirical evidence of cross-sectional variation in foreclosure discounts between independent hotels and branded hotel segments and by location. In particular, variation in the foreclosure discount is driven by independent and upscale hotels and hotels located in resorts, small metro towns, and urban locations. In addition, the study results reveal the influence of occupancy, deferred maintenance, renovation, and holding period on transaction prices.

A housing price index with the improvement-value adjusted repeated sales (IVARS) method

Purpose The repeat sales house price index (HPI) has been widely used to measure house price movements on the assumption that the quality of properties does not change over time. This study aims to develop a novel improvement-value adjusted repeat sales (IVARS) HPI to remedy the bias owing to the constant-quality assumption. Design/methodology/approach This study compares the performance of the IVARS model with the traditional hedonic price model and the repeat sales model by using half a million repeated sales pairs of housing transactions in the Auckland Region of New Zealand, and by a simulation approach. Findings The results demonstrate that using the information on improvement values from mass appraisal can significantly mitigate the time-varying attribute bias. Simulation analysis further reveals that if the improvement work done is not considered, the repeat sales HPI may be overestimated by 2.7% per annum. The more quality enhancement a property has, the more likely it is that the property will be resold. Practical implications This novel index may have the potential to enable the inclusion of home condition reporting in property value assessments prior to listing open market sales. Originality/value The novel IVARS index can help gauge house price movements with housing quality changes.

Többszöri eladások módszerén alapuló lakásárindexek számítása magyar adatokon

Jelen tanulmányban a szerző azonosítja a hazai lakáspiaci forgalmi statisztikában az ismétlődő eladásokat, és segítségükkel négyféle ún. repeat sales (többszöri eladások módszerén alapuló) lakásárindexet számít, melyek a nemzetközi szakirodalomban már ismertek, de Magyarországra országos szinten korábban még nem becsülték őket. Ezeket az indexeket több tulajdonságuk alapján is összehasonlítja az MNB (Magyar Nemzeti Bank) és a KSH (Központi Statisztikai Hivatal) hedonikus regresszióval készített, hivatalos statisztikaként használt lakásárindexeivel. Megállapítása szerint a magyarországi lakáspiaci forgalmon belül az ismétlődő eladások több szempontból sem reprezentatívak a teljes piacra. Egyrészt a főváros és a többlakásos épületek erősen felülreprezentáltak, másrészt a budapesti többlakásos épületek ismételten eladott lakóingatlanjai jellemzően kisebb méretűek. A tanulmányban bemutatott, többszöri eladások módszerén alapuló lakásárindexek hosszú távon a hedonikus indexekhez hasonló képet mutatnak a lakásárak változásáról. Utóbbiakhoz képest azonban volatilisebbek, és így, bár hasznos tanulsággal szolgálnak a lakásárak hosszú távú változásának követésében, a paraméterek szimultán becsléséből eredő folyamatos revíziókat és a piaci forgalomra való reprezentativitás hiányát figyelembe véve összességében kevésbé lehetnek alkalmasak rendszeres statisztikai közlésre.

International Real Estate Review

This study examines the impacts of the Guangzhou-Shenzhen-Hong Kong Express Rail Link on the residential property prices in West Kowloon, in which the terminus and only station of the Hong Kong section of the high-speed rail link is located. The express rail is characterised as being a link between Hong Kong and her motherland, China, which is a major source of buyers of property in Hong Kong. We investigate if there is an east-west connection premium introduced by the project by examining the spatial and temporal changes of property prices in the affected areas. Based on a sample of 282,131 transactions, this study uses the hedonic pricing and repeat sales models to examine whether property prices in West Kowloon have increased because of the development of the high-speed rail which signifies a link between Hong Kong and China and whether they have dropped because of the 2019 political movements which emphasize a decoupling. We find significant and consistent evidence to support these hypotheses from both the hedonic price and repeat sales models. The accessibility premium has been capitalised into property prices since the announcement of the project, and the size of the premium is the largest during the announcement period. However, the east-west connection premium is significantly offset by the recent events of political unrest, with properties that are located nearest the West Kowloon Station being the most affected. We derive policy implications regarding practical implications for the design and implementation of land value capture schemes and urban planning.

Quality-Adjusted House Price Indexes

The constant-quality assumption in repeat-sales house price indexes (HPIs) introduces a significant time-varying attribute bias. The direction, magnitude, and source of the bias varies throughout the market cycle and across metropolitan statistical areas (MSAs). We mitigate the bias using a data-driven textual analysis approach that identifies and includes salient text from real estate agent remarks in the repeat-sales estimation. Absent the text, MSA-level HPIs are biased downward by as much as 7 percent during the financial crisis and upward by as much as 20 percent after the crisis. The geographic concentration of the bias magnifies its effect on local HPIs. (JEL C43, E31, R11, R31)

A Longitudinal Study of American and Canadian Convenience Store Marketing Strategies

Convenience stores are part of the Canadian and American landscape. Consumers depend on them for fuel, coffee, tobacco, snacks, fast-food, bathrooms, and more. Convenience stores account for more than one third of the retail brick-and-mortar sales. Yet, there is a paucity of marketing research on this retail format. The present study examines the marketing strategies of convenience stores in 2008 and 2018, assessing the changes in strategy over a decade in the U.S. and Canada. The findings indicate that convenience stores in both regions have been able to offer products and services that will bring about repeat sales and increase their profitability. Convenience stores offer customers time saving while providing what they value most: fast service, expedient locations, quality customer service and an adapted marketing mix.  Although there were more similarities than differences in marketing strategies in both regions, Quebec convenience stores were the most effective in implementing their marketing mix and adapting their strategy. Implications for convenience stores are discussed.