Homesellers Use “Lucky” and “Unlucky” Numbers In Pricing Their Homes

Unlucky and Lucky Numbers in real estate prices

[Alvin Brickman for Metrosetter Wire]

According to an editorial by Jed Kolko, Trulia’s Chief Economist and Head of Economics, sellers take the luckiness or unluckiness of numbers into account when determining the asking price for their homes. One confusion: Why is 666 more common within the Bible Belt than any other region? Does that mean Satanists are more prevalent in the Bible Belt?

Jed Kolko, Trulia, “There’s A Reason 96 Percent Of All Home Prices End In Zero”:

Do sellers use 9’s to make asking prices seem cheaper? We put on our data-miner hardhats and dug a little deeper to find out. It looks like the answer is yes, for a couple of reasons:

  1. Expensive homes are less likely to have a 9 in the price. Only 25% of homes listed for one million dollars or more have a 9 as the last non-zero digit, compared to 53% of all listed homes. Perhaps sellers think buyers who are ready to spend two million on a home won’t be fooled into thinking it’s a bargain at $1,999,900, and those buyers probably aren’t looking for bargains in the first place.
  2. On homes with price reductions, the reduced price is even more likely to have a 9 as the last non-zero digit than the original price was. In other words, as sellers get more eager – or desperate – to sell, they’re more likely to price with a 9. On homes with reductions, the original price had 9 as the last non-zero digit 52% of the time, while the reduced price had 9 as the last non-zero digit 54% of the time.

Lucky Numbers Across the USA
Pricing with 9’s is a strategic move to make homes (or Ronco knives) seem like a better bargain. But what about lucky 7, unlucky 13, and other numbers with special meaning? Let’s spin through the digits

  • 13: For a variety of reasons, triskaidekaphobia is widespread. Lots of hotels and office buildings skip the 13th floor, and Friday the 13th has long been considered a highly unlucky day. Plenty of sellers skip the number 13, too. We looked for the number 13 anywhere in a home price – such as $136,000 or $213,900 – and found it to be much less common than the numbers on either side of 13. The number 13 appears in asking prices 13% less often than the number 12 and 17% less often than the number 14.
  • 7Where is 7 lucky? Las Vegas and Reno, of course, where 7’s are what you want to see on the slot machines. You might not think selling a home has a connection to gambling, but home prices in Nevada are more likely to have a 7 in the price than in the rest of the US. In Nevada, 3.8% of list homes have 7 as the last non-zero digit, compared with 2.8% of listed homes outside Nevada – which means that 7 is 37% more common in Nevada than in other states. Triple-7 is very rare in home prices anywhere – it’s found in only 8 out of every 10,000 asking prices – but is three times more common in Nevada than in the rest of the country.
  • 3:16 and 6-6-6: These numbers represent the good and bad of Christian numerology. John 3:16 ranks #1 in many lists of the most popular Bible verses, even before Tim Tebow put those numbers on his eye-black. At the other extreme, the number 666 represents the devil. We guessed these numbers would resonate the most in America’s Bible Belt, which covers most of the South, aside from South Florida, and is disproportionately Baptist. (For our analysis, we used the Association of Religion Data Archives to identify counties with high shares of Baptists.) Our hypothesis held true: both 316 and 666 are significantly more likely to appear in Bible Belt home prices. The number 316 is 27% more likely to appear somewhere in a home price in the Bible Belt than in the rest of the country – though 316 is very rare everywhere, showing up in roughly 3.4 out of every 10,000 asking prices nationally. And good wins out over evil: the number 666 shows up in less than 1 out of every 10,000 asking prices. Even so, 666, like 316, is more common in Bible Belt home prices than outside the Bible Belt – 39% more common, in fact. Apparently, in this region, both God AND Satan are in the details.
  • 8: Nevada may love its 7’s, and the Bible Belt its 316, but nothing approaches the importance of the number 8 in Chinese culture. The Chinese word for 8 sounds like a word that means “prosper,” “fortune,” or “wealth,” making 8 a very lucky number in Chinese culture. Need proof? The Beijing Olympics officially began at 8:08:08 pm on 8/8/08, and United Airlines flight 888 is non-stop San Francisco to Beijing. For home prices, we compared the prevalence of 8’s in neighborhoods where the US Census reports that the majority of residents are of Asian ethnicity, like Monterey Park in Los Angeles and Flushing in Queens, NY, with the rest of the US. (The Census doesn’t distinguish between Chinese and other Asian backgrounds.) In non-Asian-majority neighborhoods, 8 is the last non-zero digit in just 4% of home listings. But in Asian-majority neighborhoods, 8 is the last non-zero digit in 20% of home listings. And, among homes listed for at least a million, a whopping 37% of homes in Asian-majority neighborhoods have 8 as the last non-zero digit!

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s