Single women are losing out in the property market

WOMEN’S RIGHTS advocates routinely lament the gap between men’s and women’s wages. But the gender gap in wealth may be just as troubling. According to the Boston Consulting Group, a consultancy, in 2015 women held just 30% of all global private wealth. The Survey of Consumer Finances, a poll of American households conducted by the Federal Reserve, shows that among single 60-year-olds, men are about twice as rich as women.

According to a recent study, some of this disparity can be explained by differences in how men and women buy and sell property. Using data on 9m housing transactions carried out in America between 1991 and 2017, Paul Goldsmith-Pinkham and Kelly Shue of the Yale School of Management found that, on average, single women pay about 2% more than their male counterparts for houses, and sell them for 2% less (see chart). Given that Americans move house an average of 11 times during their lives, this disadvantage can mount up. The authors reckon that the typical single woman loses about $1,600 in housing wealth every year as a result.

What is behind the housing gender gap? Some of it can be explained by market factors: women are more prone to buying in less promising markets and at inauspicious times. (Quite why is unclear, but it may be that women are more risk-averse and so, for example, are more likely than men to sell when markets start to fall, rather than riding out the turbulence.) But the authors find that the biggest reason why women lose out lies in negotiations over price. Women are less likely to bargain down a home’s list price when buying, and tend to undervalue their own home when selling. As a result, the highest-priced home sales consistently occur when a man is selling to a woman; the lowest-priced ones, when a woman is selling to a man. The authors are careful to note that this does not mean that women are necessarily less competent negotiators. Discrimination may play a significant role. In a study published in 2015, subjects were asked to haggle with a car salesman. Even though all the car-buyers used the same script, the women were consistently offered worse deals.

New home-buying technologies such as “i-Buying”, where firms use algorithms to value properties and make initial offers, could help narrow the gender gap in housing wealth. Until then, women can expect their retirement years to be a little less golden.