This paper examines the impact of loss aversion on seller behavior in the housing market, using data from downtown Boston between 1982 and 1997. The authors find that condominium owners facing nominal losses set higher asking prices, attain higher selling prices, and exhibit a lower sale hazard compared to those without such losses. The results are consistent with prospect theory, which suggests that individuals are more sensitive to losses than gains. The study also finds that the degree of loss aversion is higher among owner-occupants than among investors, and that the effect of loss aversion on selling prices is partially corrected by the market. The findings have broader implications for understanding real estate markets, suggesting that the market is far from being a perfect asset market and that volume falls when prices decline due to both loss aversion and equity constraints.This paper examines the impact of loss aversion on seller behavior in the housing market, using data from downtown Boston between 1982 and 1997. The authors find that condominium owners facing nominal losses set higher asking prices, attain higher selling prices, and exhibit a lower sale hazard compared to those without such losses. The results are consistent with prospect theory, which suggests that individuals are more sensitive to losses than gains. The study also finds that the degree of loss aversion is higher among owner-occupants than among investors, and that the effect of loss aversion on selling prices is partially corrected by the market. The findings have broader implications for understanding real estate markets, suggesting that the market is far from being a perfect asset market and that volume falls when prices decline due to both loss aversion and equity constraints.