Economic analysis reveals behavioral factors drive most unlisted underwater investment properties, indicating financial affordability alone fails to explain real estate shadow inventory.
This study examines both financial and behavioral explanations for the existence of a residential real estate shadow market for underwater investment properties. The findings reveal that the affordability constraint explains only 44.4% of the reasons not to list a property for sale. Three documented behavioral reasons primarily drive the remaining decisions. While various investor demographic characteristics are at times significant, no distinct profile emerged to identify those most likely to reside in this portion of the shadow market.
No takes yet. Share an insight, caveat, or question.
Lane et al. (2011) studied this question.
Synapse has enriched 5 closely related papers on similar clinical questions. Consider them for comparative context: