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The Effects of Assumption Financing Across Housing Price Categories
Author(s) -
Agarwal Vinod B.,
Philips Richard A.
Publication year - 1985
Publication title -
real estate economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.064
H-Index - 61
eISSN - 1540-6229
pISSN - 1080-8620
DOI - 10.1111/1540-6229.00340
Subject(s) - capitalization , economics , valuation (finance) , finance , sample (material) , capitalization rate , house price , market capitalization , financial economics , monetary economics , real estate , stock market , paleontology , philosophy , linguistics , chemistry , real estate investment trust , chromatography , horse , biology
This study employs a standard housing valuation model to analyze the capitalization of below‐market financing across housing price categories. The study also investigates the effect of secondary financing on housing prices and the effect of the expected holding period on discount capitalization. Using a randomly selected sample of 1981–82 housing transactions the study finds: the discount associated with below‐market financing is inversely related to the absolute level of housing prices; secondary financing bears no systematic relationship to housing values; and discount capitalization is inversely related to the expected holding period.