What are you trying to say?

In the book Freakonomics, the author's cite terms that positively or negatively correlate with home value. John Hill - economist and broker with Barnett & Hill - has looked at this before, specifically to assign value to his personal kryptonite of punctuation - the use of "!" in listing descriptions (and for the record, each exclamation point used to paper over the failings of a listing translate to roughly -$8000 of a home).

A word of caution at the outset - don't confuse causation with correlation - three "!" used in a listing won't deduct $24,000 in value from your home.  Instead, you should understand that many of these terms and the liberal use of "!" in a listing indicate an agent is desperate for something nice to say about a dog property.

Where this identification is valuable is when terms that travel with higher value homes or less days on the market inform a choice - like a home builder installing a double vanity or a house flipper making the call to cover original wood floors with LVP. In 2015, I conducted an investigation as to what type of countertops mattered in a home.  What I discovered was:

  • In Abilene, Corian counters were statistically insignificant, granite increased a home's value by $11,500
  • In Dallas, Corian was statistically significant and reduced price by $98,600 (suggesting a full kitchen gut) and granite, while pulling down price by $12,000, was statistically insignificant.

Subsequently, I've looked at terms like "quartz" and "marble" and it's interesting to watch their value changes as time passes.  You can see these terms pop up to describe early-adopter Dallas listings first and then the same descriptors are associated with increased price in Abilene a few years later.

When I first asked these questions back in 2015, ChatGPT didn't exist.  Today, you can download a dataset of sales from MLS, feed them into ChatGPT, craft the right prompt and - voila! - ChatGPT identifies terms that positively or negatively correlate with price or days on the market.

I grouped the descriptors by different classes to see if I could see a theme.  My classes include

  • Blue - specific attributes or design
  • Orange - renovation project
  • Red - renovated project
  • Purple - purple prose or empty adjectives
  • Green - builder terms

In my first prompt I looked for single terms that correlated with a higher price. The top 20 terms included:

  1. Tub
  2. Walk
  3. Suite
  4. Custom
  5. Island
  6. Fireplace
  7. Shower
  8. Built
  9. Pool
  10. Closet
  11. Views
  12. Pantry
  13. Outdoor
  14. Floor
  15. Vanities
  16. Expansive
  17. Open
  18. Stunning
  19. Ceilings
  20. Gated

Next I looked at single terms correlated with a lower price.  The bottom 20 terms include:

  1. Investment
  2. Sold
  3. Potential
  4. Investor
  5. Rental
  6. Cute
  7. Paint
  8. Investors
  9. Great
  10. New
  11. Property
  12. Starter
  13. TLC
  14. Buyer
  15. Seller
  16. Adorable
  17. Ideas
  18. Laminate
  19. Financing
  20. Opportunity

I also looked for single terms that correlated with fewer days on the market. The top 20 terms included:

  1. Ready
  2. Miss
  3. (redacted - builder's name)
  4. Maintained
  5. South
  6. Updated
  7. Super
  8. Investment
  9. Stay
  10. Opportunity
  11. Nestled
  12. Years
  13. Cute
  14. Car
  15. Measurements
  16. Dryer
  17. Step
  18. Paint
  19. Backyard
  20. Immaculate

I also looked at single-word terms associated with more time on market:

  1. Island
  2. Sod
  3. Included
  4. Builder
  5. Completion
  6. Related
  7. Hinges
  8. Strucsure (sp?)
  9. Estimated
  10. Warranty
  11. Center
  12. Shower
  13. Custom
  14. Homes
  15. Construction
  16. Open
  17. Ensures
  18. (redacted - builder's name)
  19. Vanities
  20. Concept

The frustrating thing about these lists is lack of context on some terms.  To this end, the prompt was recrafted to look for phrases that correlate with days on market or closed price.

The top-20 phrases associated with increased price include:

  1. Living room
  2. Floor plan
  3. Living area
  4. Primary bedroom
  5. Stainless steel
  6. Walk closet
  7. Granite countertops
  8. Open concept
  9. Covered patio
  10. Bedroom 2
  11. Car garage
  12. 2 bath
  13. Bath home
  14. 4 bedroom
  15. 3 bedroom
  16. Steel appliances
  17. Open floor
  18. Dining area
  19. Wood burning
  20. Covered porch

The top-20 phrases associated with decreased price include:

  1. Starter home
  2. Investment property
  3. Rental property
  4. Original hardwood
  5. Great investment
  6. Investment opportunity
  7. Original hardwood floors
  8. Great starter
  9. Great starter home
  10. Central heat
  11. Storage shed
  12. Fresh paint
  13. Interior paint
  14. Hardwood floors
  15. New owner
  16. Large utility
  17. Large backyard
  18. New plumbing
  19. Private showing
  20. Exterior paint

The top-20 phrases associated with increased days on the market include:

  1. Flex cash
  2. Built's
  3. Home Lytle
  4. 12 x
  5. Bright living
  6. Door new
  7. Modern updates
  8. Roof 2019
  9. Features cozy
  10. Updates make
  11. Abilene 3
  12. Parking RV
  13. Hook ups
  14. Lot storage
  15. Bedroom boasts
  16. Plan beautiful
  17. Abilene offer
  18. Hosting gatherings
  19. Playroom office
  20. Areas updated

The top-20 phrases associated with decreased days on the market include:

  1. Floor plan
  2. Living room
  3. Living area
  4. Stainless steel
  5. Granite countertops
  6. Open concept
  7. Primary bedroom
  8. Carpet bedrooms
  9. Covered porch
  10. Dining area
  11. Walk closet
  12. Walk shower
  13. Car garage
  14. Luxury vinyl
  15. Bath home
  16. Covered patio
  17. 3 bedroom
  18. Tub separate
  19. Open floor
  20. Steel appliances
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