Posted by Jonathan J. Miller -Thursday, October 28, 2010, 10:34 AM
A few months ago, I did an analysis by floor level of Manhattan co-ops and condos, which illustrated the market phenomenon of the missing 13th floor in Manhattan. Superstition played a strong a role in floor level delineation but that trend is fading. Older buildings are more likely to be missing the 13th floor than new ones.
Last weekend’s New York Times Real Estate section cover story by Vivian Toy “Sometimes, Lucky Numbers Add Up to Apartment Sales” revived my interest in the topic.
So then there’s this research paper…
In the very interesting Department of Economics, University of British Columbia October 2010 research paper “Superstition in the Housing Market” by Nicole M. Fortin, Andrew Hill and Jeff Huang, the impact of superstition was measured by the the last number of the street number in a property address.
When the Beijing Summer Olympics opened at 08:08:08 pm on the 8th day of the 8th month of 2008, it was shown to the world that the Chinese take the auspiciousness of the number “8” seriously. In Las Vegas, where superstitious beliefs are rampant, many large casino-hotels (such as MGM, Wynn and Palms Place) omit floor numbers 4, 14, 24, 34 and 40 to 49 because the number “4” is considered unlucky in the Chinese tradition. This tetraphobia comes from the fact that the pronunciation of the word for four is very similar to the word for death in Mandarin, Cantonese, and several Chinese dialects. On the other hand, the word for eight is phonetically similar to the word for prosperity or wealth.
Think “8″ not “4″.
Apparently my batting average is not very good in my own residences, but then again, I don’t believe that each housing market I have lived in since college has been composed of at least 18% Chinese buyers as defined in this research.
Roughly every other residence we’ve had since college suggests death. I’m glad my lucky number has always been “7.”
38 (wealth – we rented when first moved from NYC to CT, ironically owner was foreclosed and we had to move)
The paper is simply presented and clear. I especially love the the academic formula variable for “Chineseness” census tract variable denoted as “Ec” and the use of the word “tetraphobia”.
Here are some results:
We find that in neighborhoods where the percentage of Chinese residents exceeds the Greater Vancouver average of 18 percent, houses with street numbers ending in “4” are sold at a 2.2 percent discount and those ending in “8” are sold with a 2.5 percent premium in comparison to houses with street numbers ending in any other digits.
And several footnotes are especially interesting including:
David Phillips, George Liu, Kennon Kwok, Jason Jarvinen, Wei Zhang, and Ian Abramson ( 2001) find that for Chinese Americans and Japanese Americans, the peak of mortality among chronic cardiac patients occurs on the 4th of the month, a striking pattern not found among White Americans.
It sounds like one should never under estimate the power of superstition. After all, a key component of value is the perception of future worth as defined by market participants. After reading this paper, I now get the Feng Shui consultant marketing thing as a phenomenon — for non-believers, in a market with more buyers guided by a form of superstition, the goal for a seller should be to reduce purchaser obstacles in order to expand marketing exposure to get the highest price for their investment.
I still think “7″ is a pretty lucky but for some reason I’ve never lived in a house including my childhood that ended in “7″ that I recall. Maybe that’s why it’s my lucky number.