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The Effect of Virtual Tours on House Price and Time on Market
Journal of Real Estate Literature  (IF),  Pub Date : 2021-02-01, DOI: 10.1080/09277544.2021.1876433
Wei Yu, Zhongming Ma, Gautam Pant, Jing Hu

Abstract

The integration of augmented reality in virtual tours was recently identified as a top emerging trend in real estate. However, little research has been conducted to examine the impact of existing virtual tours on house search process and transaction price. Our article aims to fill this gap by studying the impact of virtual tours on transaction price and marketing duration (time on market). Matching the 2016 Orange County multiple listing service (MLS) single-family transaction records with Home Mortgage Disclosure Act (HMDA) data and U.S. Census data, we apply both propensity score matching methods and two-stage least squares (2SLSs) models with instrumental variables derived by machine learning and text analytics methods. The findings of this study not only shed light on the importance of the current and future use of technology, but also provide practical implications for real estate stakeholders with respect to effective strategies to improve house value and increase property sales.