Beliefs can hex house sales: study
You don’t have to believe in superstition for it to hex your house, if the results of a forthcoming Canadian study are any indication.
Reporting in the journal Economic Inquiry, researchers uncover enormous costs associated with “magical thinking” in real estate transactions in neighbourhoods with a high concentration of Chinese residents. The good news, however, is that they also identify payoffs — on average, around five figures — when superstitions run in a seller’s favour.
“We do find premiums and penalties associated with numbers that are thought to be lucky or unlucky in the Chinese culture,” said lead author Nicole Fortin, a professor at the University of British Columbia’s Vancouver School of Economics. “And these are really sizable transactions.”
Analyzing nearly 117,000 home sales between 2000 and 2005, researchers discovered that in areas whose share of Chinese residents exceeded the metro average, houses with address numbers ending in ‘4’ were sold at a 2.2-per-cent discount while those with numbers ending in ‘8’ were sold at a 2.5-per-cent premium.
Four is associated with death in Chinese culture, and eight with prosperity. Given the average house price of $400,000 in the study period, Fortin said superstition meant the difference between an $8,000 loss or a $10,000 gain in comparison to houses with addresses ending with any other digit.
In one Vancouver ad, for example, she found eight of 20 homes aimed at buyers from mainland China ended in ‘8,’ as did the asking price of 11 of the homes. Similarly, a 2012 analysis by Trulia.com found that in Asian-majority neighbourhoods, the last non-zero digit of an asking price ended with ‘8’ in 20 per cent of listings — and 37 per cent of those priced at a million or higher — versus just four per cent for other areas.
Fortin cites important public policy repercussions, noting that some people will petition to change their addresses — often by subdividing or via another legal loophole — to make their properties “luckier.”
Edmonton real estate agent Taylor Hack, of ReMax River City, said emotion can overcome reason in almost any purchase of a principal residence, regardless of cultural background.