This paper examines seller behavior in the housing market using data from downtown Boston between 1990 and 1997. It finds that loss aversion significantly influences seller decisions. Sellers facing potential losses set higher asking prices, achieve higher selling prices, and have a lower sale hazard compared to other sellers. The results show that owner-occupants set higher asking prices than investors, but both groups exhibit loss aversion. The findings support prospect theory, which suggests that individuals value gains and losses differently, with losses having a greater impact. The study also finds that loss aversion explains the positive correlation between prices and trading volumes in real estate markets. The analysis uses econometric models to estimate the effect of loss aversion on listing prices, selling prices, and time on the market. The results indicate that sellers with potential losses set higher prices and face a longer time on the market. The study also shows that loss aversion is not limited to asking prices but affects transaction prices as well. The paper concludes that loss aversion plays a significant role in real estate markets and that the behavior of sellers is influenced by their perception of losses. The findings have broader implications for understanding real estate markets and the factors that differentiate them from perfect asset markets.This paper examines seller behavior in the housing market using data from downtown Boston between 1990 and 1997. It finds that loss aversion significantly influences seller decisions. Sellers facing potential losses set higher asking prices, achieve higher selling prices, and have a lower sale hazard compared to other sellers. The results show that owner-occupants set higher asking prices than investors, but both groups exhibit loss aversion. The findings support prospect theory, which suggests that individuals value gains and losses differently, with losses having a greater impact. The study also finds that loss aversion explains the positive correlation between prices and trading volumes in real estate markets. The analysis uses econometric models to estimate the effect of loss aversion on listing prices, selling prices, and time on the market. The results indicate that sellers with potential losses set higher prices and face a longer time on the market. The study also shows that loss aversion is not limited to asking prices but affects transaction prices as well. The paper concludes that loss aversion plays a significant role in real estate markets and that the behavior of sellers is influenced by their perception of losses. The findings have broader implications for understanding real estate markets and the factors that differentiate them from perfect asset markets.