This paper examines the distortions in house prices caused by the use of creative financing and the horizontal and vertical inequities in property tax assessments that can result if the proper adjustment of prices for financing is not made. The results show that horizontal inequities exist across financing alternatives (i.e., between conventional and assumption financing). The results also indicate vertical inequities in house prices since the amount of capitalization of financing differs across price levels.
References
1.
Agarwal, V.B. and Phillips, R.A. (1984a). "Mortgage Rate Buydowns: Further Evidence", Housing Finance Review, Vol. 3, pp. 192-197.
2.
Agarwal, V.B. and Phillips, R.A. (1984b). "Mortgage Rate Buydowns: Implications for Housing Price Indexes", Social Science Quarterly, Vol. 65, pp. 868-875.
3.
Agarwal, V.B. and Phillips, R.A. (1985). "The Effect of Assumption Financing Across Housing Price Categories", AREUEA Journal, Vol. 13, pp. 48-57.
4.
Bible, D.S. (1980). "Financing Conditions as Related to Residential Value", The Real Estate Appraiser andAnalyst, Vol. 46.
5.
Jaffee, D.M. (1984). "House Price Capitalization of Creative Finance: An Introduction", Housing Finance Review, Vol. 3, pp. 107-117.
6.
Paglin, M. and Fogarty, M. (1972). "Equity and the Property Tax: A New Conceptual Focus", National Tax Journal25, pp. 557-565.
7.
Sirmans, G.S., Sirmans, C.F. and Smith, S.D. (1984). "Cash Equivalency Valuation for Creative Financing Methods", The Appraisal Journal, Vol. 52, pp. 420-435.
8.
Sirmans, G.S., Smith, S.D. and Sirmans, C.F. (1983). 'Assumption Financing and Selling Prices of Single-Family Homes', Journal of Financial and Quantitative Analysis, Vol. 18, pp. 307-317.
9.
Smith, S.D. and Sirmans, G.S. (1984). "The Shifting of FHA Discount Points: Actual vs. Expectations", AREUEA Journal, Vol. 12, pp. 153-161.
10.
Smith, S.D., Sirmans, G.S. and Sirmans, C.F. (1984). "The Valuation of Creative Financing in Housing ", Housing Finance Review, Vol. 3, pp. 129-138.
