Redfin’s new Real Estate Scientist service plans to crunch info and report on trends they see in the home listing data they deal with on a daily basis.
One nugget that jumped out at me was the listing traffic benefits gained from pricing a home on a round number rather than a dollar higher or lower:
We’ve tried to put this information to good use. We know that listings that debuted on Friday rather than Thursday drew 7.7% more visitors; that a vacant home increased the odds of a price reduction by 9.5%; that, because of how real estate websites filter on price, a listing priced at $351,001 got as much as 7.1% less traffic than one priced a dollar lower. A team of agents, engineers, statisticians and writers worked together to produce the report. Some of their findings are surprising, while others confirm conventional wisdom, which has value too.
This seems to make perfect sense since listing sites tend to allow users to filter by fixed increments. By listing a home at $350,000, you’ll show up in searches for $300,000-350,000 AND searches for $350,000 – $400,000.
But what about the psychology of pricing? Would the house appear cheaper to buyers if it was listed for $349,999?
I haven’t looked into this much, but here’s my gut take on whether this effects actual home sales: Nobody buys a house at the low end of what they can afford. It just doesn’t happen. So gaining additional traffic from the $350,000 and up crowd isn’t going to bring in the type of person who will seriously consider buying the home.