We all know what shaggy dog stories are. They’re the jokes that go on and on and then peter out without much of a punchline. I think I found a scientific study about real estate that fits that description—but you can decide for yourself.
We remember that true “science” is only possible when a theory can be experimentally tested and then repeated by others. Since the real estate market conditions are always in flux, controlled laboratory conditions don’t exist. The result is that marketing residential real estate is rightly classified as at least as much art as science.
Since that’s the case, whenever serious study is aimed at the field of real estate sales, it deserves consideration. Such was the case a while back when a professor at George Washington University published an “econometric” study about real estate transactions. It dealt with “The Effects of Pictures and Virtual Tours on Home Sales.”
Since it involved some heavy-duty mathematical analyses, a little introductory history might be in order. It wasn’t that long ago that “listings” meant Xeroxed pages quaintly carried around in agents’ 3-ring folders. Some of those pages may still survive in a museum someplace, but they went bye-bye as soon as online real estate sites gained access to the digital listing information. It took a while longer before the web was fast enough to regularly include pictures and videos as a matter of course, but by now we all know that listings almost always feature lots of pictures, sometimes a video, and sometimes both.
So when the GWU study promised to add insight into how those visual elements are influencing home sales, it attracted more than just academic attention. For those preparing their homes to go on the market, for instance, it would seem to be worth looking into. The paper is 32 pages in length, with six tables using things like the White Heteroskedasticity-Consistent Method to calculate the covariances. True, I didn’t spend a lot of time examining the columns of numbers, but I’m glad they are all there in the tables (along with the 24 References naming the economic journals cited).
So here’s the punchline—what the Conclusions section tells us about the effects of pictures and virtual tours on home sales:
To quote the findings precisely, they “suggest that pictures and virtual tours both increase the expected transaction price and decrease the average time on the market…”