Real estate: it’s sociology, folks — Part I
Aug 4th, 2015 | By FCT
Real estate is rarely studied as a consumer behaviour; perhaps that’s because culturally real estate is so closely linked to what sociologists call social status signals—how we think we cue others about our own status. I’m buying a house. You’re not. That makes my status (temporarily) higher than yours.
Over time, as we’ve seen in July and August’s EXPERT/ease newsletters, we’ve simplified the heck out of real estate transactions, convincing ourselves that the emotional, human complexities of the intersection of money meets dreams is all about the numbers.
Housing buyers simply aren’t laptops: the social and emotional ‘determinants’ (sociologist-speak for behavioural stuff that matters) really do determine how and why people buy the way they do.
One obvious example: relocation. Relocation drives all manner of real estate market behaviours, but also we want to think of ourselves as upwardly mobile, even if our move is much more about a change in family structure (new child, divorce, death, job relocation etc.). First the dissatisfaction, then the urge to move.
Orthodox real estate statistics simply don’t apply here: consumers want not just better house quality but better neighbourhood quality as well—not a “quant.”
This aspirational strategy (we see more, we want more) has been measured against search intensity (how many properties have you looked at? Since when?), how many opportune properties are queued up for you to vet (‘arrival rate’) and the rate at which you accept those opportunities.
The decision-making game is ripe for analysis. As we’ve seen in earlier blogposts, San Francisco is already humming with mobile real estate apps and data capture platforms that Silicon Valley will deploy soon, to disrupt old buying practices.
Stay tuned: things are going to get way more interesting and fast, not least because mapping and location technologies now are so inexpensive to “hack” that app developers (like Uber’s software people) simply stitch together multiple apps to make a new one. And those new apps are targeting real estate behavioural data because that’s where the money is.
Very soon, databases will be correlating housing wealth with location preferences and migration flows; this data will transform perceptions of market possibilities.
Will real estate become more like an Airbnb experience, the online player that is disrupting the real estate market big time . . .or a TripAdvisor experience? Who knows. But change is coming and fast.
Get ready for an interesting ride.