Social media love isn’t limited to cute cat pics and the exploits of the Kardashian-Jenner clan: Zillow finds that some real estate listings are quick to pick up a social following, and those homes sell more quickly, and for more money.
New research from Zillow shows that home listings that are saved by 30 or more people within the first week of posting sell in less than two weeks; of those, more than 40 percent sell for more money than the list price.
The more popular the home, the more money it can command: More than half of homes that are saved 40 or more times in their first week on the market sell for more than the asking price.
“Popularity is what pushes that home price up and above that listing,” Skylar Olsen, senior economist at Zillow, told NBC News. “In areas where there are a lot of favorites, this tells me there’s more demand for this neighborhood… If I’m interested in this home I need to move quickly.”
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Housing experts say it’s unclear if this phenomenon is cause of effect of the red-hot market in some metropolitan areas.
“It’s not surprising in some ways,” said Christopher Herbert, managing director of the Joint Center for Housing Studies at Harvard University. “Is this a reflection of the fact that the market is tight, or to what extent is it accelerating that process?”
While hot housing markets are nothing new, a buyer previously might have been unaware of the level of competition until they attended a packed open house or heard from their realtor that another buyer had already put in an offer. Now, would-be buyers can see within a listing how many other Zillow users have saved that listing, and that knowledge could be throwing fuel on that fire.
“Certainly, the advent of these types of online search engines and the ubiquitousness of that information feeds into that,” Herbert said.
“It could be accelerating existing trends [or] it may be an acceleration of the same trend we’ve already seen,” said Joe Valenti, director of consumer finance at the Center for American Progress.
“It’s an earlier signal. It comes before a lot of other signals that you’d traditionally get to show how popular this home is and how fast you need to be moving,” Olsen said.
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Whether cause or effect, experts agree that Zillow’s analysis provides another data point that illustrates the challenge many Americans face finding an affordable place to live.
“It’s yet another sign that we’re not supplying enough housing to meet demand,” Herbert said.
“Particularly in many desirable neighborhoods, we may not be seeing the level of residential construction needed to keep up with demand,” Valenti said. “I think part of it is that we don’t necessarily see any way of sustainably expanding the supply in the types of neighborhoods and cities people are flocking to.”
Local zoning regulations can limit new building, which drives up prices, but policymakers are often slow to adopt solutions that would make other neighborhoods more attractive to buyers, Valenti said. “We don’t necessarily see the type of investment in transit and other infrastructure that would make other neighborhoods appealing.”