This is pertinent because I’m working on a Zillow add-on for the blog. Is Zillow relevant? It’s a starting point for most areas, but in pure tract-home neighborhoods they should be fairly accurate by now. Will sellers listen?
Hat tip to SM for sending this along, from the wsj.com:
On June 14th, Bill Trumbo, a 68-year-old retired financial analyst in Phoenix, Ariz., logged onto his bank’s online personal financial management account and found that his house in Phoenix had lost nearly $100,000 in value overnight.
Huh?
The explanation came that same day, when the real-estate website Zillow.com sent out a press release saying it had modified the formula it uses to estimate the value of some 97.3 million American homes, known as the Zestimate, to expand the coverage of its database of homes and improve accuracy. The company had added 25 million new Zestimates, incorporated user-submitted data about improvements and gave greater weight to more recent sales data.
For some, the value of their home went up. Others saw dramatic decreases. Overall, Zillow says, most adjustments in valuation were of 10% or less, and the overall margin of error for Zestimates dropped from 12% to 8.5%, not far off the typical 5% margin of error that most home appraisers claim.
Zillow says that slightly more Zestimates went down than went up, but declined to provide more specific information about exactly how many home valuations went one way or the other. The company also said that there was little variation by region, except that in some markets, Zestimates were made “more accurate” by the revision than others. In Denver, for example, the margin of error for home-value estimates went from 12.2% to 5.5%, meaning that Zestimates there are 55% more accurate than they were before, Zillow says.
Real Estate Research Council of Southern California has a most unusual home-valuation technique: Twice a year, the group gets volunteer appraisers to review the same, exact homes from the regional over and over again. The exercise — that adds an human eye to the great price debate — goes on every October and April.
The latest version is out (April’s), and the group — HQ’d at Cal Poly Pomona — found San Diego County values up 0.2% on a year-over-year basis.
How much impact has the tax credit had on the market?
Here is the summary of detached sales and avg. $$ per square foot in the same zip codes combined from yesterday, for the January 1st through April 15th period:
Year
$800,000-
$800,001+
2009
538/$285 psf
282/$451 psf
2010
706/$297 psf
400/$411 psf
YOY Diff
+31%/+4%
+42%/-9%
Sales above $800,000 have increased sharply (+42% YOY) without the government cheese – but the lower pricing must be a contributing factor.
When examining the pricing maze, you can also see a couple of bad comps throw a seller or buyer for a loop if they’re not aware of the background.
In a family-friendly, beach-close area like Terramar, where there has always been very low turnover, the last two sales on Los Robles could under-state today’s value, and the relatively under-satisfied demand around the beach (for cheaper homes) could surprise the next sale.
There’s also a follow-up to the Black Swan open house at the end of this video:
Jinx wondered if pricing was going to be flat for a while, and I think it’ll depend on the area in question. Some neighborhoods may look like they are going up in value, and others down.
The low-inventory conditions makes it harder to track the actual trends – either there aren’t enough comps to support a case either way, or the few comps are masking the real story. Plus the shadow inventory of defaulters is haunting the market – will there be a flood of REOs one day, or not?
Let’s highlight a few areas where buyers should proceed with caution.
The mid-Carlsbad market has shadow inventory of a different nature – new product waiting in the wings. Currently there are 150-200 homes underway around the Poinsettia/El Camino Real area, plus Robertson Ranch will add over 1,000 homes once it is built out – that’s a lot of Mello-Roos!
Two weeks in a row with a surfboard in a Porsche – will that be the new ice-cream truck? A bubbleinfo t-shirt to the first person to name that band!
Let’s take a look at the mid-range, and specifically in the $700,000s – what does that get you?
I had to split these into two videos to keep under the 10 minutes required by youtube, the first is Encinitas/Carmel Valley, the second video is in Carlsbad:
On June 14th, Bill Trumbo, a 68-year-old retired financial analyst in Phoenix, Ariz., logged onto his bank’s online personal financial management account and found that his house in Phoenix had lost nearly $100,000 in value overnight.
Print
