Industry News

Money can buy a big house … but not happiness

Psychologist author applies research to real estate

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Home sellers may be at risk of earning less on the sale as the real estate market transitions to a buyer's market -- and they are at risk of losing something else, too: happiness. Daniel Gilbert, a Harvard University psychology professor and author of "Stumbling on Happiness," said it's common for sellers to feel a loss when they are parting with something, and that loss can be more substantial to a person's happiness than the happiness that a buyer gains through a purchase. "Sellers overvalue things relative to buyers. Sellers tend to think of transactions as losses," he said. That simple psychology could explain, in part, why real estate agents in formerly hot markets have found that sellers continue to price their homes too high while the market has slowed. Real estate data companies have reported that sale prices have continued to hike up in some markets even as sales have plunged 20 percent or more, year over year. Gilbert, speaking during the Real Estate Connect San Francisco co...