Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

A Member of the Law Professor Blogs Network

Wednesday, February 2, 2011

Competition and Market Structure in Local Real Estate Markets

Posted by D. Daniel Sokol

Jason Beck, Armstrong Atlantic State University, Frank A. Scott, University of Kentucky, and Aaron Yelowitz, University of Kentucky - Department of Economics address Competition and Market Structure in Local Real Estate Markets.

ABSTRACT: The persistence of the standard six percent real estate sales commission across markets and over time calls into question the competitiveness of the residential real estate brokerage industry. While there is anecdotal evidence that some local real estate markets are fairly concentrated, no systematic study of market structures has been conducted. We have collected primary data on the number and market shares of real estate brokers in a variety of small, medium, and large real estate markets across the U.S. for 2007 and 2009. In addition to these cross sectional data, we have also collected longitudinal data on the size distribution of firms for Louisville, KY for a nine-year period. In our cross-sectional analysis of medium and large markets, we find no evidence that market concentration might create problems for competition. We do find that small markets on average have higher HHI’s than medium and large markets. The longitudinal analysis reveals that many small brokers are in and out of the market, selling a house or two one year and selling zero houses the next year.

http://lawprofessors.typepad.com/antitrustprof_blog/2011/02/competition-and-market-structure-in-local-real-estate-markets.html

| Permalink

TrackBack URL for this entry:

http://www.typepad.com/services/trackback/6a00d8341bfae553ef0148c771a7a6970c

Listed below are links to weblogs that reference Competition and Market Structure in Local Real Estate Markets:

Comments

Post a comment