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Is Social Media Influencing Homebuying?

September 14, 2016

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Social media has become a part of our lives in a way that touches nearly everything. So it shouldn’t come as a surprise that the way we interact with each other on social media platforms like Facebook is having an impact on our home-buying habits.

New research from economists at New York University, Harvard and Facebook has found that Facebook users who see their friends’ home values rise 5 percent or more were statistically more likely to buy a home themselves in the next two years. Additionally, the homes they bought were larger and more expensive than average, and the buyers paid larger down payments. 

“The homes they bought were larger than average.”

“We were relatively certain that we’d see some effect,” Johannes Stroebel, a professor at NYU’s Stern School of Business, told CNBC. “What we didn’t know was how large that effect would be.”

Essentially, the research suggested that people who say their friends’ homes appreciate in value were more confident that buying a home themselves would be a worthwhile investment. This seemed to have an impact regardless of the location where the parties were located – i.e. a bump in Boston home prices would see a user in Chicago more likely to buy.

In addition, findings from the California Association of Realtors’ 2014 Survey of California Home Buyers have suggested that social media plays a role when these homebuyers actually enter the market. According to the Mercury News, more than 75 percent of home buyers reportedly used social media in their home search, with most respondents saying they looked to their friends and family to provide tips and leads. Others used social media to obtain neighborhood information (44 percent of respondents) and to view their real estate agents’ Facebook pages (42 percent).

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