Marketing Time and Pricing Strategies

This study examines how overpricing of properties (in terms of above-market price), along with various housing attributes, influence their time-on-market (TOM). A two-stage methodology is deployed. In the first stage, the above-market price is measured by the difference between list price and expected sale price, with the latter being regressed through a hedonic pricing model. Then the effects of various factors including above-market price on TOM are tested by a Cox model, with full sample and with sub-period samples respectively. The results with the full sample show that only dummy variables depicting years 2003-2005 and flats located in Kowloon are significant in affecting TOM. In the sub-period analyses, however, factors such as the above-market price, sale price, a flat’s tenure status, general property price trend, and changes in unemployment rate have significant impacts on TOM, yet their respective impacts change over time. Specifically, the effectiveness of overpricing in optimizing sellers’ returns and TOM depends on economic conditions as well as on the availability of other alternatives on the housing market. Directions on future studies are then