Neighborhood amenity packages, property price, and marketing time

Abstract

Purpose

The purpose of the study is to introduce modeling of common neighborhood amenities as packages, rather than as separate independent variables in a single model. Results from the standard modeling technique of including separate controls for each amenity are provided for comparison. A secondary purpose is to provide price and time‐on‐market implications for amenities in seasoned versus newly constructed properties.

Design/methodology/approach

Common neighborhood amenities are grouped according to the total amenity bundle offered by each neighborhood. Hedonic pricing, hazard modeling, and two‐stage least squares regression are used to estimate price and time‐on‐market impacts for six common amenities.

Findings

Neighborhood tennis courts, clubhouses, boating facilities, and golf courses, as well as several amenity packages, significantly impact property values. Valuation of particular amenity packages differs between newly constructed and seasoned homes. Time‐on‐market results are less convincing.

Research limitations/implications

Neighborhood amenities considered separately can produce misleading results, so amenity packages should be included in future research. Specific numerical results would not apply to other markets and perhaps not to other time periods.

Practical implications

The study offers evidence regarding which neighborhood amenities are valued most highly in newly constructed properties, which is of interest to developers. The study also offers evidence on which amenities are valued more highly in seasoned properties, which is of interest to buyers due to concerns about re‐sale values.

Originality/value

The study offers the first grouping of neighborhood amenities into packages to more closely resemble the way buyers consider amenities during the purchase decision. The study is also the first comprehensive survey of commonly‐offered neighborhood amenities.

Citation

Benefield, J.D. (2009), "Neighborhood amenity packages, property price, and marketing time", Property Management, Vol. 27 No. 5, pp. 348-370. https://doi.org/10.1108/02637470910998483