Analysis of Even Pricing in Real Estate Markets: Different Asset Types and Implications

Abstract

This study examines price clustering in different real estate markets. Using a novel data set, we document that prices are clustered around even figures, and exact prices are not common in the residential, commercial and land markets. Prices increase in multiples of five hundred, five thousand or fifty thousand depending on the market, and particular digits can predict the prices. The magnitude of even pricing is comparable to months’ worth of disposable income and has potential implications on the financial well-being of the market participants.