1. Virtual domination? The online domination of housing search Richard Dunning, PhD Student

2. © The University of Sheffield Contents Background to the research Research Questions Methods Results Conclusions

3. © The University of Sheffield Background to research Search matters: Failure of NC/Seller emphasis to explain housing outcomes Lack of research into buyers Restriction of opportunities Equity issues related to accessibility of information Changing roles of search media

4. © The University of Sheffield Background to research Failure of mainstream economic models to regularly predict housing market outcomes – switch to understand search behaviour Policy makers Behavioural economics Dearth of recent housing search research (e.g. seminal text Rossi, 1980, Maclennan, 1982) Growth in desire to understand buyer behaviour Fundamental change to apparent search techniques (emphasis on internet research into estate agents and sellers)

5. © The University of Sheffield Background to research Restriction of opportunities Institutions arise in housing markets because of the local and complex nature of market characteristics Advertising media present opportunities for buyers The internet opens up more properties than traditional media (and may act as a substitute) Access to the internet therefore may influence the opportunities and therefore housing outcomes

6. © The University of Sheffield Background to research The internet changes transaction costs Whilst more properties are available for consideration, more information is also available about those properties (e.g. house price history) and area information (e.g. local schools, newspapers purchased) Information is available from home (change in access may change perceptions about cost of information) Changes in availability over search Changes in aspirations over search

7. © The University of Sheffield Research Questions 1.How comprehensive is internet usage in property search? 2.When do households use the internet (search stages)? 3.How important was the internet in their search? 4.What is the relationship between internet usage and search type?

8. © The University of Sheffield Method Limitations of controlled experiments Sheffield in 2010 In depth interviews with recent movers to confirm terminology Pilot Survey to 100 addresses Extensive postal survey to 4,843 addresses of properties sold in 2010 469 responses (9.68% of all transactions) Unequal representation

9. How comprehensive is internet usage in property search? Overall usage - 8 7% of HH used the internet to search for a property Age – Sharp decline in usage for buyers over 70 © The University of Sheffield Results: Q1. Ubiquity of Internet

10. © The University of Sheffield Results: Q1. Ubiquity of Internet How comprehensive is internet usage in property search? Income Households with incomes below £15,000 are less likely to use the internet than households with higher incomes (age? Access?) Households with incomes over £60,000 are less likely to use the internet than households with median incomes (outsource search? Fewer properties? Higher cost of time?) Price Households purchasing a home for less than £80K were less likely to use the internet than higher priced home households Above £80k there is no clear correlation between price and internet usage Geography City centre and South Community Assemblies have the highest levels of internet usage Remainder of city forms a periphery varying from 13-20% non-internet usage Highest levels of non-usage fall in the South West and North East (20% and 18% resp.) New Build Households who purchased new build properties were significantly less likely to use the internet than households that purchase older properties (35% to 12% - low sample no.)

11. © The University of Sheffield Results: Q1. Ubiquity of Internet Thoughts: The internet is used by the majority of households in their property search Usage is not consistent across households If use of the internet presents more housing opportunities, restricted access prevents potentially suitable properties from the choice set Access to larger choice sets is restricted for elderly households and lower income households – inequitable information asymmetry (may result in distortions in the market)

12. © The University of Sheffield Results: Q2. When? When do households use the internet? Most frequently cited information source throughout Two groups of internet users emerge: households that use the internet equally throughout the search and those who use the internet heavily at first and then less after beginning physically viewing properties (anchors and framing effect) First Consider MoveFirst viewingFirst OfferThroughoutNever Personal Knowledge39.69.43.541.06.5 Friends and relatives29.413.66.425.3 Newspapers24.24.63.717.150.4 Estate agents window25.810.94.620.538.2 Estate agent in person14.520.012.918.334.3 Estate agent website29.813.34.331.021.7 Internet property search35.46.42.642.213.4 Internet area search19.511.310.420.738.1

13. © The University of Sheffield Results: Q2. When? When do households use the internet? Mean age is lower for use throughout (37), and most use at beginning (40) than mean overall (43) Mean income is higher for households that used the internet often throughout the search (£35-40k) than households who never used the internet (£25-27.5k) and households who used the internet most later in the search process (e.g. most used at first offer on a home £22.5-25k) No clear distinction between means of when the internet is used and home price Younger, higher income households more likely to use the internet throughout the search process and more likely to use it often when first considering moving home.

14. © The University of Sheffield Results: Q3. Importance? How important was the internet in their search? Most frequently cited Very Important Only Personal Knowledge was cited less frequently Unimportant Very ImportantImportant Moderate Importance Of Little ImportanceUnimportant Personal Knowledge57.129.87.42.8 Friends and relatives24.525.214.715.620.0 Newspapers6.512.316.823.041.4 Estate agents window7.618.119.621.033.7 Estate agent in person8.915.718.620.436.5 Estate agent website33.827.711.69.417.4 Internet property search59.019.45.15.810.7 Internet area search21.919.016.516.726.0

15. © The University of Sheffield Results: Q4. Relationship? What is the relationship between internet usage and search type? Households who used the internet throughout spent less long between beginning searching and moving (mean 12months) than those who never used the internet (mean 18months) Households that used the internet often moved in less time (13m) than households who never used the internet (18m), however, households that did use the internet but only seldom spent longer searching (19m) Households that used the internet often started searching for a property in less time after first considering moving (3m)than households who used the internet less frequently (7m) or not at all (10m)– this may be due to the ease of accessing preliminary search information from the internet.

16. © The University of Sheffield Results: Q4. Relationship? What is the relationship between internet usage and search type? Households who never used the internet physically viewed half as many properties (4) as households that used the internet very often (9), and placed offers on fewer properties (1.25 to 1.73) No major difference in search length pressure between levels of internet usage

17. © The University of Sheffield Conclusions The internet is used by the majority of movers to search for a new property (and its importance is greater than ‘traditional’ information sources) Internet use varies substantially and relates to age (with possible correlation to income) Two groups of internet users: households who use the internet throughout their search and households who use the internet intensively at the start and less after they start viewing properties physically Users of the internet are likely to shorten the overall length of search and physically view more properties than households who never use the internet.

18. © The University of Sheffield Further analysis of data Relationship between information source and search trigger Relationship between info source and previous experience Relationship between internet use and meeting initial aspirations Further testing of household characteristics, e.g. education, relationships Spatial analysis of respondents, and internet usage against distance of move