Senior Citizen’s Bargaining Power in Residential Real Estate Markets
This paper reports the result of the first study conducted to determine whether the law of one price holds in the single-family house market when a senior citizen is a party to the transaction or if the experience that comes with age provides seniors with bargaining power that enables them to transact at better prices than others. Data from 6,278 single-family house transactions that occurred in Montgomery County, Ohio during the years 2007 through 2009 is analyzed. The results indicate that the prices seniors paid did not differ significantly from the prices that other buyers paid. This finding is not consistent with the notion that market experience enabled seniors to operate at a bargaining power advantage. In addition, it was discovered that seniors sold properties for approximately 5.9% less, on average, than other sellers. This finding suggests that other factors placed seniors at a bargaining power disadvantage when they disposed of their home.