Average buyer looks at house for 17 mins
Says this survey, and it certainly reflects my own experience - in fact perhaps that's a bit high. If the current owners are in their house, as they were in my case, you feel a little embarassed at your intrusion.I've noted before that this does not explain why you are prepared to spend so much money on it without looking again, and for example, this is less time than you would spend, say, on a pair of jeans. One explanation I came up with is because it is seen as an investment, rather than an act of consumption. This can't quite be right for two reasons. One, because people usually spend quite a bit of time researching investments, and second, because rental houses are more purely a consumption good and those are similarly given only a short research time.
Another explatation is surely that a lot of research (on area, size, etc) has gone in beforehand, and when you're there, there is not much really you can once you've had a look at it. I'm sure those more experienced than I check for damp, sunlight, etc, but that still can't take very long.
Slightly related to this is William Buiter's argument that housing is not net wealth, as an increase in house prices makes us richer, but it also increases our future costs (unless we can get out of being housing consumers by moving abroad or something similar), and hence the net effect is zero. Martin Wolf in the comments notes that obviously the housing stock is net wealth, as if it was demolished we would be a lot poorer, and so what Buiter means is an increase in house prices is not an increase in net wealth. I'd modify this slightly - an increase in house prices not reflected by an increase in quality of housing is not net wealth. I imagine a lot of the renovations done in the last 10 years have not added much to a houses value, and in some cases might have detracted, but there must be a small positive impact.
Labels: house prices
posted by Matthew @ 11/22/2007 08:15:00 AM
Comments: 7
