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The Affect of Social Networking on Housing Strategic Default

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The Research Institute for Housing America recently put together a 62 page special report on strategic default in the context of a social network.  The study likens the current housing market of strategic default to an epidemic spread like a disease via social media networking sites. 

Susceptibility to normative influence, or SNI, "measures how easily people can have their belief changed as it relates to thier willingness to strategically default at various stages of being underewater in their mortgage."  SNI is considered the most influential social network variable.  Social connectivity is next, followed by what they call Mavenism.  Although third in influence, its reach cannot be ignored. 

Models were made to study the process of social interactions and how they affect independent decisions such as the decision to strategically default.  The study likens this advocacy to a disease that spreads quickly through a society.  With SNI a person's opinion on strategic default can be changed, thus causing the disease to spread rapidly. 

Mavens, on the other hand, are those who have larger social network reach and who are better able to spread the disease simply because they come into contact with greater numbers of people.  Fragile markets are the most suceptible, thus causing a market collapse.  Are we as realtors aiding in the spread of the disease?  Follow the link below to read and print the report.  It is very enlightening.

http://www.housingamerica.org/RIHA/RIHA/Publications/78456_10923_Research_RIHA_Default_Report.pdf

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Morris Massre
https://about.me/mmassre
 

 

Comments (4)

Bill Gillhespy
16 Sunview Blvd - Fort Myers Beach, FL
Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos

Hi Morris,

I wanted to read the report but was surprised to see the the sources for the report were mortgage bankers, Citi, United Gauranty, IMortgage, etc.  The lead auther ( Seiler ) quotes himself !  Interestingly, the report chooses to use the word disease to describe those afflicted with the inclination to stop paying on a mortgage and includes " ...the susceptibility to infection...".  Stopped reading at that point.  Just sayin"  !!!

Dec 12, 2011 05:51 AM
Morris Massre
Pembroke Pines, FL
Real Estate Instructor Broward County Florida

Bill, you should have read a little further.  The board of trustees were those you mentioned.  The authors were two professors from Rutgers and Old Dominion and someone from a modeling center.  Give it a chance.

Dec 12, 2011 06:27 AM
Bill Gillhespy
16 Sunview Blvd - Fort Myers Beach, FL
Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos

Hi Morris,  I was put off by their use of such blatant negative terminology: disease, infectious, etc.  I'm ok with a marketing piece by that industry but resorting to such negative labeling makes it unnecessary to read further.  Just sayin'.

Dec 12, 2011 06:41 AM
Morris Massre
Pembroke Pines, FL
Real Estate Instructor Broward County Florida

Don't take it so hard Bill.  It's just a study, and a very good one at that.  What else would you call it besides a disease?  Anyway, the study is incredibly detailed.

Dec 12, 2011 06:49 AM