Using nearly 4.4m onsite records from prospective property buyers in China and cross referencing this data with 620, 000 transactions (collected from 2013~2017) Maggie Hu (et al.) from the Chinese University in Hong Kong set out to see if viewing activity would reveal anything useful about ultimate property-buyer behavior?
That people who make site visits to properties are interested in property is a given but what the researchers discovered, in addition, was that the especially keen (those who made multiple visits) are likely to pay higher prices and end up buying bigger properties than they initially planned on.
One would think the more seasoned viewer was the more discerning buyer? This they may be but the relationship between how many visits a potential buyer makes to view property and the price/size of the property they eventually transact on is established in the paper beyond doubt.
The research stops short of suggesting reasons for this but I’d throw in my two-pennyworth here and suggest some form of heuristic behaviorism is involved i.e. the same sort of bias that persuades people to bid up at auctions if their previous bid has been trumped?
Whatever, and a key point for vendors, is this behavior becomes exaggerated in thin markets where supply is short. Somehow I think developers may be ahead of the researchers in having grasped this elemental point some time ago!
You can read the paper in full via this link Seeing is Believing.
Happy Sunday.