The science behind open houses

As over 31,000 homes open their doors this weekend for the “Nationwide Open House Weekend,” one brokerage asserts through their new report that the effectiveness of an open house is not consistent from city to city. Looking at a quarter of a million listings in nine cities across the nation, Redfin donned their “we’re scientists” hat from 2007, and revealed that not all cities are created equal.

First, the brokerage noted that some cities rank highly for volume of open houses, while others barely use them at all:

1. San Francisco – 83 percent of listings hold an open house
2. Boston – 63 percent
3. Seattle – 53 percent
4. DC – 44 percent
5. Queens – 41 percent
6. Portland – 32 percent
7. Los Angeles – 29 percent
8. Chicago – 22 percent
9. Austin – 21 percent
10. Phoenix – 5 percent
11. Las Vegas – 3 percent

Product Manager for Statistics and Trends at Redfin, Tim Ellis wrote, “Apparently every weekend is open-house weekend in San Francisco. In fact, holding an open house is so expected there that homes that don’t hold an open house are a full seven percentage points less likely to sell than those that do. In Las Vegas and Phoenix, where open houses are rare, the exact opposite is true. Homes that don’t hold an open house are 17 percentage points more likely to sell than those that do.”

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Ellis added, “Everywhere else, the picture gets a little more fuzzy. In the other eight markets we examined, there was virtually no difference in the percentage of homes that sold, whether they had an open house or not.”

Additionally, the national brokerage dug deeper to find that homes that held an open house within the first week of listing rather than later performed far differently:

Should Realtors hold open houses?

“So should you hold an open house?” Ellis asks. “If you’re in San Francisco, absolutely. If you’re in Phoenix or Las Vegas, probably not. Everywhere else, it most likely doesn’t really matter whether or not you hold an open house, but if you’ve got a good agent, he or she will probably hold one anyway.”

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