Average time to sell a property and credit conditions: Evidence from the Italian housing market survey

This study examines the influence of housing credit conditions on the time on market (TOM) for residential properties in Italy, using a unique dataset from the Bank of Italy survey on the Italian housing market. The analysis was carried out on a sample of roughly 1000 real estate agents over the period 2011-2015 using panel data techniques. The results support the view that an increase in housing market liquidity, measured by the loan-to-value ratio, reduces the average TOM of a property, thus improving the matching process between buyers and sellers. The results are found to be robust to specifications including the traditional determinants of TOM, used as controls (i.e., price revisions, potential buyers, mandates to sell, the role of brokers, and so on). The results also show that a higher price reduction, possibly associated with an initial mispricing by the seller when setting the initial listing price, seems to be associated with a higher TOM for residential properties.