Recent research published by Paul Goldsmith-Pinkham and Kelly Shue from Yale University discovered a Gender Gap between Men and Women buying and selling houses.
Researchers used detailed data from CoreLogic covering over 50 million housing transactions and matched property listings across the US from 1991 to 2017. The gender gap in housing returns exists in all years within the sample. It remains substantial in regions with high average education, income, and house price levels.
It is very interesting how Men and Women might have different approaches at the time of buying, fixing and selling homes.
Based on the research, the magnitude of the gender gap does vary with demographics, location, and time. They found the following conclusions:
• Single Men earn one percentage point higher unlevered returns per year on housing investment relative to Single Women, with Couples occupying the intermediate range.
• The gender gap grows significantly larger after adjusting for mortgage borrowing: Men earn 6 percentage points higher levered returns per year relative to Women.
• Data on repeat sales reveal that Women buy the same property for approximately 2% more and sell for 2% less.
• The gender gap, in housing returns, varies by holding period and arises because of gender differences in the location and timing of transactions, choice of the initial listing price, and negotiated discount relative to the listing price.
• Gender differences in upgrade rates, preferences for housing characteristics, and listing agents appear to be less important factors.
• The gender gap varies with market tightness and demographic characteristics but remains large in regions with high average education, income, and house price levels
New Facts
The researchers consider the following facts:
• Approximately half of the gender gap in housing returns can be explained by gender differences in market timing, i.e., the choice of holding period, where and when to buy, and when to sell. Women earn lower returns on housing partly because they tend to buy when aggregate house prices are high and sell when they are low.
• Women purchase properties when they are listed at higher relative prices, and also choose to list for lower relative prices. In addition, Women negotiate worse discounts relative to the listing price.
• The highest transaction prices are associated with Male Sellers and Female Buyers, and the lowest transaction prices are associated with female sellers and male buyers. Female Sellers and Male Buyers are associated with the largest negotiated discounts relative to the listing price, while male sellers and female buyers are associated with the smallest discounts.
Reasons
The researches consider the following possible reasons:
First, Men may purchase riskier properties, such that their higher return represents compensation for the additional risk.
Second, Men may invest more in housing maintenance and upgrades, such that their real investment return is lower than implied by analysis using only the sale price and purchase price.
Third, Women may be older, have more children, or have lower education and income, and these demographic factors may drive the gender gap in housing returns.
Finally, researches find that the gender gap in returns and prices narrows in markets when sale volume is high relative to the share of outstanding listings. This suggests that liquid housing markets suppress some of the drivers of the gender gap.
Facing all these facts, my question is what was the real estate agent’s role during the negotiations representing Women buyers and sellers. Real estate brokers and agents have a fiduciary duty with the customers and among all is to get the best information about home prices before making the final decision on the negotiation table.
Source:
You can read the research in the following link:
https://paulgp.github.io/papers/Gender_Gap_in_Housing_Returns_20191016.pdf