As any agent can attest, branding in real estate starts with names.
Witness, for example, the frenetic and constant rebranding that goes on, at the hands of realtors, of New York City’s neighborhoods. People won’t pay top dollar for an apartment in working-class Sunset Park, Brooklyn, but a closet within the porous perimeter of neighboring barrio Greenwood Heights or South Park Slope? Now you’re talking.
Names matter, even if there is (or once was) a private road called Psycho Path in Traverse City, Mich., a Divorce Court in Heather Highlands, Pa. and an intersection of Lonesome Road and Hardup Road in Albany, Ga.
Two University of Georgia professors, Velma Zahirovic-Herbert and Swarn Chatterjee, recently set out to quantify the effect of street-naming and subdivision-naming (not exactly neighborhood-naming) on housing values. Their study, published in October by the academic Journal of Real Estate Research, studied Baton Rouge, La., between October 1984 and April 2005 to try and figure out what the effect of having the words “country” or “country club” in a street name has to do with the price of the houses on that street.
What did they find?
Move to Country Lane or Country Hill Road or Country Court — any street with the word “country” in it — and you’re adding 4.2% to the value of your house, in the eyes of buyers, as compared to streets with no “country” affiliation. Move to Country Club Drive or Country Club Mews, and suddenly you add an additional 5.1% to the value of your home (yes, that’s an eye-popping total of 9.3%). A good way to preserve value in a recession, right?
The premium, Zahirovic-Herbert and Chatterjee found, comes from a certain “snob value” that is valued mostly by wealthier consumers who want to look like hotshots in everything they buy.
“The reason is that it captures the prestige associated with living in a particular neighborhood or subdivision and, therefore, represents conspicuous consumption,” the report says.
The interesting part, however, is that the researchers behind this report controlled the study for factors including size, community amenities, and school quality. They found that the “country” names add to sales prices even if all other factors – pools, redone kitchens, square footage – are equal, and buyers actually value street or subdivision name more than the quality of schools for their children.
So builders remember: a street is resoundingly not a street by any other name.