A University of North Carolina at Chapel Hill expert on how communities form and change over time and a graduate student in economics have completed a survey of recent home buyers in Raleigh and the rest of Wake County. Their goal was to gauge the Internet's impact on the residential real estate industry.
As expected, Dr. Risa I. Palm and Michelle Danis found the Internet has partially revolutionized such real estate transactions. The surprise was that the rich source of information's effect was not nearly as strong yet as some suspect or as it might one day become. "We found that the Internet has had little impact on housing search patterns," said Palm, professor of geography and dean of UNC's College of Arts and Sciences. "However, those using the Internet tend to visit a larger number of houses personally than those who do not use the Web as an information source. Overall, we found that about half our respondents used the Internet, and the other half did not."
A report on the survey, which involved 1,200 households in the year 2000, appears in the current issue of the journal Urban Geography. Danis, the co-author, is pursuing a doctorate in economics at UNC.
"We asked buyers how important various factors in their decision to buy a house were," said Palm, one of the nation's top authorities on real estate agents. "The number one factor was the safety of the neighborhood."
The second most important factor was the general appearance of the neighborhood, she said, and third was the appearance of the house. Lower on the priority list were the number of bedrooms and bathrooms and closeness to area schools.
"Amenities such as gardens, swimming pools, hot tubs, views and so on here the least important factors," Palm said. "The average home buyer in Wake County visited seven to 10 houses before making the purchase decision. More than 20 percent visited more than 20 properties."
People new to the state, on average, examined twice as many homes in person as previous N.C. residents did.
In all cases, the chief source of information about house buying was personally driving through neighborhoods, she said. Real estate agents ranked as the second most-often cited source.
Researchers found no differences between Internet users and non-Internet users in how much formal education the buyers had, how much their houses cost and how old the structures were.
Not surprisingly, those who explored the real estate market via the Web tended to be younger than those who did not, Palm said. "The main difference between Internet users and non-users was that the former, overall, visited more houses in person," she said. "This is contrary to what we had thought -- that Internet users would visit the houses virtually and therefore have less need to inspect the same number of houses. In fact, they did wider searches than the others."
Why is unclear, she said. It might be that Internet users also visited more houses in person because they tended to be less easily satisfied than non-users or because their youth allowed them more energy for the search.
"Our belief is that the Internet is going to become increasingly important in the purchase of homes as more and more people gain Internet access," Palm said. "It will be a long time, if ever, before the Internet replaces real estate agents.
"Originally, I became interested in real estate agents in graduate school when one of my professors characterized them as being like geography teachers. They teach prospective homebuyers about the nature of the city or whatever area they work in."
Journal
Urban Geography