The Impact of Buyer-Type on House Price: Some Evidence from the USA

Purpose - This paper aims to report the results of a study conducted to determine whether investors systematically pay less for single-family houses than do buyer/residents. Design/methodology/approach - Data from 3,443 single-family house transactions were subjected to regression analysis. Findings - Investors in this study paid 13.24 percent less, on average, than buyers who reside in the property. Research limitations/implications - The study was limited to transactions occurring during a single year in one American city. Future research could test whether the results apply in other locations. The study did not consider the influence of seller-type on transaction price. Future studies could incorporate this facet of the transaction. The results have implications for property tax authorities and fee appraisers because the presence of investors in a housing market may introduce a two-tiered transaction set which could distort the assessment process and/or the indicated value calculated by fee appraisers using the comparable sales approach. Originality/value - This paper provides useful information on the impact of buyer-type on house price.