Yes, you read the subject line correctly. Citing a recent study from NYU, Harvard and Facebook, CNBC is reporting that decisions people make about buying property are heavily influenced by their participation in social networks – in particular Facebook. According to the report, if someone’s Facebook friends experience increases in their house price, they are more likely themselves to invest in property over the next couple years. Talk about peer-pressure, the study suggested a significant impact on local housing markets, in aggregate. The report looked at home pricing and volume data from 831 counties (covering 1998 to 2012) as well as Facebook network information of the various residents.
“A person who is currently renting and whose Facebook friends saw their homes appreciate 5 percent more than the market average in the past two years is 3.1 percentage points more likely to buy a home themselves in the next two years. The researchers also found that people are more likely to buy a larger house, pay more for a given house and make a larger downpayment.”