How is Virtual Reality Technology Changing Housing Transactions? New Evidence from Big Data

While previous research has considered the socioeconomic factors that influence housing mobility, few studies have specifically examined a particular technology’s positive or negative effect on housing mobility. In this study, we contribute to the understanding of housing mobility from a technological perspective by providing the first empirical evidence of the role of virtual reality (VR) technology in facilitating home sales. To correct any endogenous biases caused by self-selection, we implement an endogenous switching regression model(ESRM) in the empirical analysis. Using micro-transaction data, we find that VR technology decreases time on market(TOM) as expected, and the result holds after a series of tests. Moreover, the effect of VR on home transactions is asymmetric. VR displays partially substitute for on-site showings during the COVID-19 pandemic, helping to offset the pandemic’s negative effect on the housing market. Finally, this study deepens our understanding of how VR technology improves the efficiency of house searches, matching, and transactions in the mobile internet era