How Facebook friends may influence homeownership
08/23/2016 | Author: Editorial Staff
Posts on social media outlets like Facebook can inspire people to try lots of things, such as that hot new restaurant in town and, as new research shows, investing in real estate.
Economists at Harvard, New York University, and Facebook found that people who saw Facebook friends in their area experience increases in the price of their home were influenced to invest in housing themselves within two years. They were also more likely to buy a bigger home, pay more for a home, and make a larger downpayment. Of course, the effect was seen most among people whose friends discussed their home investments and how attractive they felt their investments were.
Specifically, a renter with Facebook friends with homes that appreciated 5% or more than the market average in the past two years is 3.1 percentage points more likely to purchase a home in the next two years. The renter-to-buyer may pay 3.3% more for a given house, make a 7% larger downpayment, and buy a 1.7% bigger house. In short, if your local market is hot and homeowners are experiencing increases in the value of their homes, you should mention this on Facebook. You never know who you might influence to make the jump from renting to buying.
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