Market Sentiment Pricing Strategy in Single Family House Transactions: A Case Study of Two Counties

This paper examines how the use of zero digits in single-family home sales reflects market sentiment. We focus on Skagit County and King County in Washington State, which differ markedly in population density and average housing prices. Our findings indicate that due to cognitive bias, zeros known to be psychologically appealing are frequently used in the ones, tens, hundreds, thousands, and even ten-thousands places of transaction prices. We also find a contemporaneous correlation between the use of zeros in these positions and market sentiment, suggesting that more frequent use of zeros in these positions, indicative of stronger market sentiment, is associated with higher sale prices.