As Americans, we thrive on choice. We want to choose the best shirt among hundreds of shirts at the store, the best car among dozens on the lot, the best spatula among all the spatulas at Kitchen Kaboodle. We research the best options on Consumer Reports, Yelp, and other valuable resources.
But, can too much choice be a problem? Can the challenge of so many choices actually prevent us from making a simple decision efficiently or even making one at all? I’ve walked into a store many times, only to give up my epxedition because there were too many choices.
In 2004, a book called the Paradox of Choice came out which addressed the psychology of consumer decision making. Among other ideas, it proposed that too many choices causes anxiety. The author goes on to assert that an abundance of opportunities can even cause depression and loneliness due to unfulfilled desires. And, choosing one good option over another perfectly fine option can lead the consumer to be despondent over missed opportunities, eventually enjoying all things less.
I’ve been thinking about this idea of the paradox of choice when I look at the current real estate market. We all know that there is a lot of housing inventory on the market, and that homebuyers are being very cautious. As Realtors, we see nothing but opportunity–lots of choice, great prices and crazy low interest rates–and we wonder why they aren’t buying everything up. Consumer confidence in the economy is obviously an issue. People are worried that their jobs may not be there in a year and don’t want to commit to a thirty year mortgage.
And, perhaps, there is too much choice out there for the real estate consumer. When there are 30 homes that meet your search criteria, how do you choose? Homebuying can cause a lot of anxiety under normal circumstances, but now buyers have to think about if they are buying the right house out of so many choices. They might also be concerned about the missed opportunity of what might come on the market tomorrow, next week or, even worse, after close of escrow. I think it might be easier for homebuyers in a more stable market when they may only have 5-7 houses that meet their criteria.
I’m no expert in the area of consumer psychology, but I’ve been fascinated by this idea of the paradox of choice since that book came out, based on my own consumer experiences. I would love to hear thoughts from homebuyers on this topic. What do you have to say about having an abundance of choice?