The Del Mar Castle which sits on the top of a hill overlooking the ocean and the community of Del Mar was built in 1925 by Ruth and Marston Harding who relocated from Massachusetts. The Castle contains approximately 10,000 sq. ft. including a detached guest house. It was designed by famous local architect Richard Requa who went to Europe to study the best design and returned with authentic stained glass, doors and hardware from castles in the south of Spain.
It’s that time of the year – the 2017 forecasts are starting to roll out!
Zillow has been conservative about our local markets. For the most part, the actual appreciation of the Zillow Home Value Index has been higher than their forecasts over the last two years.
Their local forecasts for 2017 are all lower than their 2016 guesses, and what they are predicting could also be described as ‘Flatsville’. If their local forecasts of +0.9% to +2.2% come true, it would mean that several sellers would end up selling for less than they could have gotten in 2016.
Are we ready for that yet?
Local ZHVI-Appreciation Forecasts
The Zillow data changes slightly, depending on where you look on their website, and whether you use town names or zip codes. Here is the LINK to find others.
It helps to demonstrate the comps, so I drove by the street that had the most recent sale – $1,470,000 last month for 1,668sf ($881/sf while we’re asking $815/sf). Th next-door neighbor confirmed that the new owners are spending another $500,000 for renovations.
I had the dog experience of the ages today. I’ve owned six dogs in my life, and as most of you know, the last one just died. I don’t have anything against dogs.
But the open house is a place of business. Every time I go to an open house, I identify myself as an agent, hand off my business card, and get out of the way – out of respect of knowing the agent on duty has a job to do with interviewing buyers, in hopes of selling the house.
It should occur to a buyer’s agent that bringing two dogs into an open house may be disruptive and distracting, and instead have some respect for the situation. A simple agent introduction would go a long way!
Our regular commenter elbarcosr backed me up on how wacky the zestimates have been lately. They seem to be getting worse, which is hard to believe.
Being a Zillow homer now, I thought I better look into it.
Let’s serve up a nice big softball. Certainly the zestimates have to be accurate on recently-sold homes, don’t they? We saw how Redfin’s evaluator can cozy up close to a recent list or sales price, and you can’t blame them. After a few years, the database would look pretty consistent.
Does Zillow do the same? Wouldn’t it make sense to have your algorithm compute a recent sales price into the property’s zestimate? Because if you did, it would also help value the nearby homes that haven’t sold recently – because that’s how everyone would value them.
Evaluations in unique, non-tract areas is tougher. But if we are just looking at recently-sold properties, and their zestimates – the uniqueness shouldn’t matter as much!
I looked at 28 homes sold in La Jolla, Del Mar, and Rancho Santa Fe that closed between $2,000,000 and $3,000,000 in 4Q15, and compared their sales price (the definition of value) to their zestimates.
The average margin of error was 16%, and after removing the four that were wrong by more than $1,000,000, the average error was still 12%.
These are houses recently sold, and their sales price defines the actual value!
Even though the $2,000,000 to $3,000,000 range is the lower end for those areas and there are plenty of comps to help pin-point a zestimate, let’s consider an easier target.
Carmel Valley should be the hotbed of zestimate accuracy, especially when we look at the low-end where every data point is a pure tract house.
There were 57 CV sales in the fourth quarter between $1,000,000 and $2,000,000 that were considered.
The average margin of error was 3.6%, which is probably acceptable. But if it was any higher, there would be concerns – these are tract houses that just sold in 4Q15, and have a long history of steady comps around them!
The only zestimates that might be close are in pure tract neighborhoods.
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