Editore"s Note
Tilting at Windmills

Email Newsletter icon, E-mail Newsletter icon, Email List icon, E-mail List icon Sign up for Free News & Updates

February 16, 2006
By: Kevin Drum

HOUSING BUBBLE WATCH....The LA Times reports that the housing bubble in Southern California is all but over:

Six months of gains in Southern California's median home price were wiped out in January while sales activity dropped sharply, further signs that the region's once-hot real estate market continues to lose steam.

The statistics, released Wednesday by DataQuick Information Systems, a La Jolla-based real estate research firm, suggest that the market is making a "soft landing" of flattening prices and fewer sales after sizzling gains during the six-year boom, analysts said.

A soft landing is devoutly to be hoped for, and that's certainly the message I got last week when I started playing around with the intriguing new site Zillow.com, which allows you to check the approximate value of any house in the country. Naturally, I immediately used Zillow to check the value of my own house and then the houses of all my friends, and the results pretty much all looked like the chart on the right: a steep rise, and then flat for the past 4-5 months.

Looking at broader measures (zip codes, cities), I also saw some occasional dips, but for the most part flatness. A year from now I guess we'll know if that really did portend a "soft landing" or if it was just the calm before the storm.

Zillow.com, by the way, like so many other things on the web, is either fascinating or frightening, depending on your temperament. Just type in your address and you get a satellite picture of your neighborhood showing the approximate value of your house and the approximate value of all your neighbors' houses as well. Click on "Details" and you can find out what they paid for their house, how big their house is, and so forth. And they can do the same to you. Have fun!

Kevin Drum 12:46 PM Permalink | Trackbacks | Comments (87)

Bookmark and Share
 
Comments

Anybody know the street address for the Armstrong Ranch?

Posted by: The Confidence Man on February 16, 2006 at 12:51 PM | PERMALINK

Well, it is BS for here -- less than we paid for the house 8 years ago, which is less than it was appraised for after we had an agreement to buy. I've read others with similar experiences with Zillow.

Posted by: Gore/Obama '08 on February 16, 2006 at 12:52 PM | PERMALINK

Zillow sucks at valuation in the areaa I'm familiar with. It could be a cool tool, but they've really got to get some better comps to make it useful.

Posted by: decon on February 16, 2006 at 12:53 PM | PERMALINK

Great googly moogly, it even tells the year my house was built (1929). I knew that when we bought the place, but I'd forgotten. Sw33t!

Posted by: Gregory on February 16, 2006 at 12:54 PM | PERMALINK

The difference between the Japanese blowout and what lies ahead in the US is largely demographic. There are more people coming into the US needing a place to live, so there will be pressure to sustain housing prices. On the downside, there still is little talk about whether the US has a technically appropriate, optimally located housing stock. We still ignore the fact that cheap energy, particularly to power air-conditioning systems, made possible the huge migration to the south and west in the last century. Expensive energy could force a retreat northward and into denser urban settings. Perhaps Buckminster Fuller's vision that we would all live in trailers still holds true (no FEMA jokes, please).

Posted by: kostya on February 16, 2006 at 1:02 PM | PERMALINK

Go over to Zillow.com, plug in your address (or the Jones') and you'll get a quick market look at your house value. In the Puget Sound area, flower of the nation, house values peaked this summer, and have begun to decline.

Posted by: Jeff II on February 16, 2006 at 1:03 PM | PERMALINK

My current neighborhood is not in the database yet, but the house I grew up in is. Aside from the size, number of stories, and year built, all the data (IE: street address and lot size) which I can verify are correct. If that's what they offer, I'll stick to more traditional ways of valuing real estate.

Posted by: PetervE on February 16, 2006 at 1:06 PM | PERMALINK

Zillow.com, by the way, like so many other things on the web, is either fascinating or frightening, depending on your temperament.

On a side note, I do wonder how this will affect personal relationships. I just discovered that our house is pretty close to the most expensive one in my small neighborhood. I was going to tell my neighbors (with whom I often share cool websites) about Zillow, but decided not to just because I didn't really want them to know that about our house.

On a similar note, I do data processing for our county Democratic party and part of that includes public voter records. On a whim recently I looked up some of my daughter's teachers and discovered them to be registered Republicans. And I use to really like them. ;)

Seriously, though, I don't always think that having more information about the people in your life is always a good idea. Even if you're aware of it and try not to do it, it's hard not to change your opinion of someone based on data like this (house price, party affiliation).

Posted by: Dug Steen on February 16, 2006 at 1:08 PM | PERMALINK

Perhaps Buckminster Fuller's vision that we would all live in trailers still holds true (no FEMA jokes, please). Posted by: kostya

I saw him give a lecture once. Made Timothy Leary sound normal. It wasn't trailers, it was those gawd awful geodesic domes that he "invented" that were the future of residential housing. Lord, kill me now.

The Japanese Bubble and the U.S. Bubble are in no way similar. I know. It was once my job to know End of discussion.

Posted by: Jeff II on February 16, 2006 at 1:08 PM | PERMALINK

Kevin, darling, your coastal bias is showing. I live in one of the fastest-growing parts of my fly-over but fast-growing state, and Zillow had zilch on my neighborhood - zilch even on my county, and zilch on any place in my Congressional District. In fact, of 120 counties, Zillow had data on precisely four - none of which are among the 10 fastest-growing counties in the state. If you check Zillow's list of where they have home value information, most fly-over states are blank. Granted, we're also not in a housing bubble, but still.

Posted by: yellowdog on February 16, 2006 at 1:09 PM | PERMALINK

Dear me, Zillow, don't tell the Property Tax people what your estimate is for our house. It already jumped 26% this year, and they valued it lower than you did.

Posted by: Linkmeister on February 16, 2006 at 1:12 PM | PERMALINK

Between friends and coworkers, it hasn't appeared to be very accurate. It's 9% off on the house I bought 2 months ago - on which I got a pretty good deal, and similar for a friend who bought a house a few blocks away. For some of my coworkers, it's guessing high by a similar percentage.

Posted by: kevin on February 16, 2006 at 1:13 PM | PERMALINK

I checked our new home on Zillow. It had the size and the number of bathrooms incorrect, which had an effect on the price they said it was worth ($20,000 below what we just paid for it in 8/05) I used the chase product to check our old house when we were getting ready to put it on the market. It's value there was well below what we got for it.

Posted by: Cathy on February 16, 2006 at 1:15 PM | PERMALINK

According to Zillow, my house does not exist.

Posted by: cmdicely on February 16, 2006 at 1:16 PM | PERMALINK

The value I got for my house was within a thousand dollars of what it was appraised at a few weeks ago for a refinance (should have gotten a fixed rate sooner than I did.) So at least in my case it's accurate.

I should hope it would flatten out. The left side of the curve looks way too much like Google stock. You want to see something spooky, look at the 5 and 10 year valuations. At least here where I live, the value spike at the beginning of this year was downright bizarre.

If you use the graphing tool to add "USA" values, the overall values have moved in a much more moderate manner this past year than California ones (wish I could post graphs here.)

Advice to California homeowners: If you refinance, don't get greedy at this point and try to get a load of cash out.

Posted by: tbrosz on February 16, 2006 at 1:17 PM | PERMALINK

Zillow is off my projected value by a factor of ten.

Posted by: JayAckroyd on February 16, 2006 at 1:17 PM | PERMALINK

Dear me, Zillow, don't tell the Property Tax people what your estimate is for our house. It already jumped 26% this year, and they valued it lower than you did. Posted by: Linkmeister

Weird, isn't it? House market value is always much higher than tax value. In the old, pre-Internet(s) day, you'd have to do a little leg work to get the comps and such. Now, a visit to any RE web site would get the local authorities all the info they need to bring you taxes into line.

Posted by: Jeff II on February 16, 2006 at 1:17 PM | PERMALINK

Zillow isn't accurate right now and the company even admits it. It's an interesting site but don't take it lock stock and barrell quite yet. Give them some time to update their database. Beta can be a scary thing.

Posted by: Tank on February 16, 2006 at 1:18 PM | PERMALINK
According to Zillow, my house does not exist.

And, I should add, it is in California -- West Sacramento -- not some "flyover state" that others have noted are largely blank.

Of course, its a beta and all, but there are pretty substantial limits to Kevin's breathless "Just type in your address and you get a satellite picture of your neighborhood showing the approximate value of your house and the approximate value of all your neighbors' houses as well."

Posted by: cmdicely on February 16, 2006 at 1:20 PM | PERMALINK

As an architect, if there's anything we should have learned by now -- particularly those who live in California -- it is that there is no such thing as a soft landing in the housing market.

Doesn't hurt to hope though, as long as you're willing to face possible consequences -- "to hope 'til hope creates from its own wreck the thing it most contemplates..." (PB Shelley)

By the way, I've been contemplating a blog entry on the housing bubble, but it's too painful to contemplate. So I blogged about the Mansard Roof instead. What a cop out...

--
HRlaughed
(click on the above to visit my blog... or don't)

Posted by: HRlaughed on February 16, 2006 at 1:21 PM | PERMALINK

Aha. Now I see. It's calculating the value of the entire building, not the individual apartments--which means it is only off by a factor of 4 or 5, in the opposite direction.

Posted by: JayAckroyd on February 16, 2006 at 1:22 PM | PERMALINK

Zillow is off my projected value by a factor of ten. Posted by: JayAckroyd

How so? I find it pretty much right on for the half dozen properties I check. There are problems with minor details that maybe result in a 5-10% inaccuracy in value. But if they are off a "factory of ten," that sounds like either you are very proud of your house (or don't know it's true value) or they just happened to leave a zero out in your case.

Posted by: Jeff II on February 16, 2006 at 1:24 PM | PERMALINK

It's dead wrong. It says my house has three stories, but it actually has 4. It also says the house was built in 1900, but the house was actually built in 1845.

It does indicate a sharp decline in value since December, however, which may or may not be true.

Posted by: Baldrick on February 16, 2006 at 1:28 PM | PERMALINK

According to Zillow my houses are worth so much that I can buy the Armstrong Ranch!

Posted by: lib on February 16, 2006 at 1:28 PM | PERMALINK

Jeff II: The Japanese Bubble and the U.S. Bubble are in no way similar. I know. It was once my job to know End of discussion.

Interesting. The oldest mortgage banking system is probably the Danish hypothecary banks, now in their fourth century. Over time, with wars, economic cycles, population growth, etc. it appears that housing prices there have been basically inflation neutral over the long run. Japanese prices went through the ceiling and then came down. Now US prices, as well as prices in other markets, e.g. euro-zone perimeter countries, are no longer rising. Are you suggesting that real (as opposed to nominal) prices will not retreat?

Posted by: kostya on February 16, 2006 at 1:30 PM | PERMALINK

Aha. Now I see. It's calculating the value of the entire building, not the individual partments--which means it is only off by a factor of 4 or 5, in the opposite direction. Posted by: JayAckroyd

The program is really designed for SFR, not MFR. Furthermore, the true value of rental property is in it's potential income stream, not the physical structure as a re-sale.

Posted by: Jeff II on February 16, 2006 at 1:30 PM | PERMALINK

Post had an article on the problems with the site today:
http://www.washingtonpost.com/wp-dyn/content/article/2006/02/15/AR2006021502494.html

It's early days yet. Fairfax county has their assessments and sales online for some years now, so this is just another increment.

Posted by: Bill on February 16, 2006 at 1:31 PM | PERMALINK

Well, it gives a value for my house that's within a few percent of what I would have guessed. But a better measure is that it is almost spot on the asking price for the house next door - which isn't on the market yet (then how do I know? Because, hey, they are the people next door and they told me!)

So I give it pretty fair marks, at least for my liberal elitist, out of touch with mainstream values neighborhood.

Posted by: craigie on February 16, 2006 at 1:33 PM | PERMALINK

How so? I find it pretty much right on for the half dozen properties I check.

I live in a coop aparment across the street from several brownstones. It seems to be picking the brownstones as comps, and then doing a square footage calc for my entire 41 unit building.

This generates a low number, much less than the value of the 41 units combined. It shows 5.5 million when the number is more like 18 or 20 million.

But the picture was accurate.

Posted by: JayAckroyd on February 16, 2006 at 1:34 PM | PERMALINK

slightly different emphasis here:

http://www.breitbart.com/news/2006/02/16/D8FQ86900.html


The year 2005 brought double digit increases in housing prices in 72 areas. It would be nice if housing prices stayed flat for a while, and the construction boom may help.

Posted by: republicrat on February 16, 2006 at 1:38 PM | PERMALINK

Furthermore, the true value of rental property is in it's potential income stream, not the physical structure as a re-sale.

The value to a purchaser is also the value as an income stream, so there shouldn't be a substantial difference, at least in theory, and where there is designating one or the other as the "true value" is somewhat arbitrary outside of the context of a specific purpose for the valuation.

Posted by: cmdicely on February 16, 2006 at 1:39 PM | PERMALINK

Well, I can see my back yard from there!
Too bad the construction date is off by almost 80 years.
I think their data needs a little work.

Posted by: kenga on February 16, 2006 at 1:41 PM | PERMALINK

Japanese prices went through the ceiling and then came down. Now US prices, as well as prices in other markets, e.g. euro-zone perimeter countries, are no longer rising. Are you suggesting that real (as opposed to nominal) prices will not retreat? Posted by: kostya

"Real" vs. "nominal" prices? Oh, pray tell, do explain.

Otherwise, I wasn't saying anything about the U.S. market, which is a true market. In Japan, land has historically been the underpinning value of any real property, residential structure value, until recently, was negligible. The odd thing about this is that commercial property was treated the same way - no serious consideration given to rent income stream. There were, are taxation and zoning issues that the Japanese government was forced to address in the 1980s and 1990s that were only partially resolved.

None of this may matter in a couple of decades if Japan's population continues to decline as projected, and if they are smart enough to resist immigration pressures. By 2020, Tokyo's train system will be at only 104% of capacity at rush hour instead of 118%.

Posted by: Jeff II on February 16, 2006 at 1:42 PM | PERMALINK

On a side note, I do wonder how this will affect personal relationships. I just discovered that our house is pretty close to the most expensive one in my small neighborhood. I was going to tell my neighbors (with whom I often share cool websites) about Zillow, but decided not to just because I didn't really want them to know that about our house.

Everything changes after Total Information Awareness...

Posted by: craigie on February 16, 2006 at 1:43 PM | PERMALINK

I'm in cmdicely's boat; it attaches my address to my neighbor's house, and although my house is visible on the satellite photo, it doesn't exist as far as valuation goes.

As for the overall valuation, several houses in the neighborhood just changed hands for $50,000 over zillow's valuation.

Still, it's a neat toy.

Posted by: S Ra on February 16, 2006 at 1:45 PM | PERMALINK

We still ignore the fact that cheap energy, particularly to power air-conditioning systems, made possible the huge migration to the south and west in the last century. Expensive energy could force a retreat northward and into denser urban settings.

That's not likely. PV cell technology continues to improve, and PV generation for sunny days with high demand for air-conditioning is nearly at break-even with other forms of peak generation. And PV isn't nearly as cheap as nuclear for electricity. A northward migration would increase demand for winter heating, but we are likely to have greater difficulty meeting the demand for heating than for air-conditioning.

Posted by: republicrat on February 16, 2006 at 1:45 PM | PERMALINK

For those in California, I was wondering about how the property tax is assessed on the recently purchased/built homes, and what will the effect on property taxes be if the market value of these homes fall over the next 5 to 10 years. Would you expect that the assessed values fall and that the property tax will fall as well?

Posted by: Yancey Ward on February 16, 2006 at 1:47 PM | PERMALINK

When I looked at zillow last week, my gut was it was about 10% high for my place. Alas, a similar-sized unit in my townhouse development went on sale Tuesday for just about exactly 10% less than the value zillow shows for it. From the pics the unit looks updated and well-staged, and the realtor is a known name, so I would conclude that the asking price is more accurate than zillow. This is in the SF East Bay.

Posted by: Tom on February 16, 2006 at 1:47 PM | PERMALINK

I'm a Real Estate Appraiser, and I ran a Zillow.com check on my house -- it said it was worth $280-320k, which is about what I would expect from a drive by appraisal or a decent AVM program. AVM's (Automated Valuation Model) is one of the biggest trends in the lending industry, to check whether there are problems with appraisals. Zillow.com is a decent free AVM, which normally cost $25 from a Title Company.

The problem with AVMs is that they are only as good as the data they have to work with -- garbage in, garbage out. My house is bigger than the public records show -- and unless the zoning is taking into account, the value will be way off.

Zillow.com is still in beta testing, and I sent them an email explaining why the Zestimate was worthless. I changed the search parameters to be closer to what my house actually is, and it came up with 50 comps -- unfortunately, it gave a Zestimate value for the comps, instead of the actual sold prices -- which is why it's worthless. The property in question sold in December 2004 for $425k, and in August 2005 for $440k -- the Zillow.com Zesitmate value was $367k.

Like I said -- a decent free AVM, but with some worthless features.

Posted by: ck on February 16, 2006 at 1:48 PM | PERMALINK

Two houses on my block have been for sale for the past 6 months. One of them finally sold last week for it's original asking price. But a year ago, that house would have sold in an instant. There was an abrupt halt about 6-8 months back.

Posted by: Osama_Been_Forgotten on February 16, 2006 at 1:49 PM | PERMALINK
Of course, its a beta and all, but there are pretty substantial limits to Kevin's breathless "Just type in your address and you get a satellite picture of your neighborhood showing the approximate value of your house and the approximate value of all your neighbors' houses as well."

What is a 'beta?'

And, cm, why so quick dissing Kevin ATT?

Posted by: obscure on February 16, 2006 at 1:50 PM | PERMALINK

I actually just had a professional appraisal done on my condo and Zillow was $120K off from the appraisal. Some of the comps listed were the same as the appraisal, so it looks like they have some more work to do.

In terms of the bubble, it seems in Portland that prices were flat over the holidays but have rebounded with a vengence. Some pretty marginal properties that were sitting on the market have sold and reasonably prices properties and fixers sell in a day. Although Portland is still a bargain compared to Seattle and CA, so it's probably the effect of equity refugees trying to get out of CA before the pop.

Posted by: adventuregeek on February 16, 2006 at 1:51 PM | PERMALINK
I'm in cmdicely's boat; it attaches my address to my neighbor's house, and although my house is visible on the satellite photo, it doesn't exist as far as valuation goes.

It just claims there is no house at my address at all.

Of course, my house is fairly new, was built on what used to be two incredibly small lots (and now is merely one small lot, and is at an address that plenty of automated systems identify as being in a city which hasn't existed since 1987.

Posted by: cmdicely on February 16, 2006 at 1:52 PM | PERMALINK
What is a 'beta?'

I'll let Wikipedia answer that.

And, cm, why so quick dissing Kevin ATT?What is "ATT"?
Posted by: cmdicely on February 16, 2006 at 1:56 PM | PERMALINK

Hey, price inflation.

Does that mean full employment?

Posted by: Matt on February 16, 2006 at 1:56 PM | PERMALINK

I'm in cmdicely's boat; it attaches my address to my neighbor's house, and although my house is visible on the satellite photo, it doesn't exist as far as valuation goes. Posted by: S Ra

But remember, cmdicely lives in fly-over country.

Posted by: Jeff II on February 16, 2006 at 2:00 PM | PERMALINK
"Real" vs. "nominal" prices?

"Real" prices are, presumably, adjusted for inflation (constant dollars), and could drop while nominal prices (in current dollars) continue to rise or, at least, remain flat.

Posted by: cmdicely on February 16, 2006 at 2:01 PM | PERMALINK

Doesn't work in NYC at all. For my address, it gives a number that is neither the value of my apartment nor the value of the building, but pretty much a random number.

Which is too bad, because according to the map there's a place available for $187k on 5th Avenue and 95th Street. I believe they also throw in a garage full of gold bricks and a pony.

I'm going to look at how much the Brooklyn Bridge costs according to these guys...

Posted by: theorajones on February 16, 2006 at 2:05 PM | PERMALINK

Strike that.

The house I was talking about that sold? Zillow says it's $908k. It sold for something like $738k, so zillow's calibration in my neighborhood is clearly off.

Posted by: Osama_Been_Forgotten on February 16, 2006 at 2:06 PM | PERMALINK

According to Zillow, my house does not exist.

mine either. there's a road there, but my entire neighborhood shows up as trees. not unexpected, since i'm in a pretty new subdivision.

my last house shows up, though - at the price we sold it for, 2 years ago.

the house i grew up in isn't on the map, though the rest of the block is... no satellite data, so i can't tell what that means.. :)

Posted by: cleek on February 16, 2006 at 2:06 PM | PERMALINK

Matt full employment is when you work 3 jobs.

Posted by: Neo on February 16, 2006 at 2:09 PM | PERMALINK

"Real" vs. "nominal" prices?

"Real" prices are, presumably, adjusted for inflation (constant dollars), and could drop while nominal prices (in current dollars) continue to rise or, at least, remain flat. Posted by: cmdicely

Cute, but try that one on your RE agent and he'll yank his card out of your hand so fast you'll get a paper cut.

Your definition, while correct, is sort of like comparative shopping for the anal retentive, as you don't get many chances to make "historic" purchases with yesterday's dollars and vice versa.

Everything can be adjusted for inflation, but it's only a meaningful measure if a particular good or service has inflated at a rate higher than another good or service. But "affordability" is, like incest, relative. This is why you'll see idiots complaining about $3/gallon gasoline who seem to have had bottled water surgically attached to their hands.

Posted by: Jeff II on February 16, 2006 at 2:11 PM | PERMALINK

Definitely way, way off. I checked my old San Francisco home, and while the values were in the ballpark, the addresses didn't match up with the right locations--they were off by a block or more. Also, in my folks' neighborhood the prices are 1970s low--are all these people with brand new Benzes in front of 5000 sq. ft. mansions really spending more on their cars than their mortgages?

Posted by: samiam on February 16, 2006 at 2:13 PM | PERMALINK

And, I should add, it is in California -- West Sacramento -- not some "flyover state" that others have noted are largely blank.

I'm sorry, how does Sacramento not constitute flyover land? I think the definition includes everything between the George Washington Bridge and the SF-Oakland Bay Bridge.

Posted by: Al on February 16, 2006 at 2:20 PM | PERMALINK

I'm sorry, how does Sacramento not constitute flyover land?

Technically it is "drive-past" land, as in "on the way to Tahoe."

Posted by: Tom on February 16, 2006 at 2:31 PM | PERMALINK
Cute, but try that one on your RE agent and he'll yank his card out of your hand so fast you'll get a paper cut.

Since the person using it used it in the context of long-term economic trends, where "real" prices are more meaningful, not in context of making a real estate deal, your cute idea about trying it on a real estate agent (which doesn't even make any sense, how would it apply to any discussion one would have with an agent regarding a deal?) is, in addition to being bizarre, completely irrelevant.

The point about long-term real price trends (which may or may not be masked by inflation in particular cases) remains, and ought to be answered on its own merits, rather than with irrelevant distraction techniques.

Posted by: cmdicely on February 16, 2006 at 2:31 PM | PERMALINK
I'm sorry, how does Sacramento not constitute flyover land?

West Sacramento, first of all, isn't Sacramento (not the same city or county), and it (like the most of the I-80 corridor up through the eastern fringes of metropolitan Sacramento) is increasingly part of the fringe of the Bay Area.

I think the definition includes everything between the George Washington Bridge and the SF-Oakland Bay Bridge.

I think any definition that puts Berkeley in "flyover country" can be rejected out of hand.


Posted by: cmdicely on February 16, 2006 at 2:35 PM | PERMALINK

I'm sorry, how does Sacramento not constitute flyover land? I think the definition includes everything between the George Washington Bridge and the SF-Oakland Bay Bridge. Posted by: Al

Careful, Al, you're talking about where the "base" lives. ("Base." If that ain't the truth.)

Posted by: Jeff II on February 16, 2006 at 2:37 PM | PERMALINK

The point about long-term real price trends (which may or may not be masked by inflation in particular cases) remains, and ought to be answered on its own merits, rather than with irrelevant distraction techniques. Posted by: cmdicely

Talk to the hand, and pass me the Pellegrino.

Posted by: Jeff II on February 16, 2006 at 2:39 PM | PERMALINK

West Sacramento, first of all, isn't Sacramento (not the same city or county), and it (like the most of the I-80 corridor up through the eastern fringes of metropolitan Sacramento) is increasingly part of the fringe of the Bay Area.

Yeah. Just like North Bend is a suburb of Seattle, not.

I think the definition includes everything between the George Washington Bridge and the SF-Oakland Bay Bridge.

I think any definition that puts Berkeley in "flyover country" can be rejected out of hand.
Posted by: cmdicely

I'd go along with that. But anywhere east of there is questionable and will have to be put before the committee.

Posted by: Jeff II on February 16, 2006 at 2:41 PM | PERMALINK

The program is really designed for SFR, not MFR.

Yes, that's obvious. As I think about it, though, it would be difficult. I don't have a deed, for example. I have shares in a corporation that carry leasehold rights.

Posted by: JayAckroyd on February 16, 2006 at 2:51 PM | PERMALINK
Yeah. Just like North Bend is a suburb of Seattle, not.

I don't know where you live, but, yeah, the entire I-80 corridor up through Sacramento is, indeed, increasingly becoming part of the Bay Area urban blob, largely because of Bay Area housing prices, as Bay Area commuters keep working their way out the line. Its been a big driver for home prices in the whole corridor.

The same things happened along the other East-West routes from the Bay to the Valley.

Posted by: cmdicely on February 16, 2006 at 2:53 PM | PERMALINK

It seems pretty accurate for my Seattle suburb...and if it is, it portends a bit less than a soft landing for Seattle. A steep decline in home prices over the last 6 months in King County (which includes Seattle and suburbs). It could be a blip, but there wasn't really anything else like it on the graph over the last 10 years.

Posted by: Susan on February 16, 2006 at 3:07 PM | PERMALINK

Things have definitely softened here in Manhattan. People are no longer getting their asking prices.

Posted by: JayAckroyd on February 16, 2006 at 3:16 PM | PERMALINK

Pretty accurate for my South San Jose townhouse. I know of 2 identical units on the market and Zillow is within aobut 10K of each of them. Though one bigger unit just sold for about 30k more than Zillow's zestimate.

Posted by: Rick Coencas on February 16, 2006 at 3:42 PM | PERMALINK

Whoa, you've just revolutionized my life. That's one amazing website. Incidentally, to your north (Oregon), where the median house costs just $279, the trend is still going up. Many folks have talked about regional bubbles, and Zillow seems to suggest that.

Posted by: Jeff Alworth on February 16, 2006 at 4:07 PM | PERMALINK

We checked the price of a townhouse in the Salt Lake City area. Recent sales of these townhouses have been in the $230-240 thousand range. Zillow's zestimate was $2.5 million.

Posted by: ursus on February 16, 2006 at 4:19 PM | PERMALINK

According to Zillow, my house does not exist. Posted by: cmdicely on February 16, 2006 at 1:16 PM

Hey, cmdicely, we both live at non-existent houses!

Sweet!

Posted by: Dr. Morpheus on February 16, 2006 at 4:31 PM | PERMALINK

Sacramento is fly-over country. Yes or No?

Man, if there's such a thing as a verbal argument, that's got to be it.

Posted by: frankly0 on February 16, 2006 at 4:52 PM | PERMALINK

Toxic mortgages start to reset in droves this year. Equity does not accumulate when prices are flat. Get ready for some fallout in the form of foreclosures, folks. I wonder if zillow.com uses local foreclosures in its computation of the local comparable housing prices.

Posted by: troglodyte on February 16, 2006 at 4:58 PM | PERMALINK

For my house, it only counted the bottom floor for square footage. And it gave us one less bedroom. The price seemed right.

When I fixed the errors, the price was way higher than a similar house across the street that just sold.

How is it a neat toy with such questionable accuracy? Is Fox News a neat toy?

Posted by: zenger on February 16, 2006 at 5:02 PM | PERMALINK

How is it a neat toy with such questionable accuracy? Is Fox News a neat toy? Posted by: zenger

Zenger, unbunch your panties. It's a beta version. That translates, roughly, as the test version, where bugs are discovered, etc. Even with the mistakes that many people have discovered, it's still a very power resource for RE research. Undoubtedly, some of the errors involve input. Other errors will result from using tax records with errors. Do you expect the creators of the site to go door-to-door to verify all the information?

Posted by: Jeff II on February 16, 2006 at 5:13 PM | PERMALINK
Man, if there's such a thing as a verbal argument, that's got to be it.

Pedantic, perhaps, but I think you mean "semantic". Most arguments are "verbal".

Posted by: cmdicely on February 16, 2006 at 5:13 PM | PERMALINK
And, cm, why so quick dissing Kevin ATT?What is "ATT"?

All the time.

(Sorry about that.)

Posted by: obscure on February 16, 2006 at 5:22 PM | PERMALINK

A "verbal argument" is, by definition, an argument fundamentally based on the meaning of the words.

Posted by: frankly0 on February 16, 2006 at 5:33 PM | PERMALINK

**Thanks for the wikipedia link, cm. Hopefully next time I can remember to do it myself...

Posted by: obscure on February 16, 2006 at 5:34 PM | PERMALINK

In fact, I guess our current dispute is another example of a "verbal argument".

Posted by: frankly0 on February 16, 2006 at 5:35 PM | PERMALINK

In my particular region (can't reveal it), the prices that Zillow show are very close to "asking prices". However, those who are unsuccessfully trying and failing to sell are all asking about 15% over current selling prices. Our region's real estate market went into a nasty slump one year ago this month as our micro-market bubble burst, but real estate agents are loath to admit it. We were very fortunate to sell a house in September, bu it went for about $25K under Zillow's mark. If we had tried to sell at anywhere near the Zillow amount, we would still be looking for a buyer today. As it is, we put the still-sizable equity into a liquid asset savings account, earning about 4% with total liquidity, while we've been enjoying the rental market. We're renting a wonderful house i a great neighborhood for a fraction of what our previous PITI (principal, interest, taxes, insurance) payment was. A real estate agent friend tells me that there are thousands of people like us who are currently renting and awaiting a market correction. Or maybe it's just wishful thinking, as I can't imagine so many people in our region who are as smart as I. And if that was true, then the rental market wouldn't be as dead as it is.

--
HRlaughed

Posted by: HRlaughed on February 16, 2006 at 6:10 PM | PERMALINK
A "verbal argument" is, by definition, an argument fundamentally based on the meaning of the words.

That's certainly what a "semantic argument" is, but I've never seen the phrase "verbal argument" used that way (though I've frequently seen it used to mean what might be more properly called an "oral argument").

Though certainly, whether "verbal" or "semantic", this discussion risks becoming somewhat pointless.

Posted by: cmdicely on February 16, 2006 at 6:23 PM | PERMALINK

Got my house all wrong by $40K. Sq ft and number of rooms were correct, but it added one bedrom and one more bathroom. When I took out those rooms and adjusted for other mistakes, it got much closer to what I paid. It had no info about my sale 15 months ago, or about any remodels since 1977. And you play around with the kind of roof you have and it can mean half the value of the house.

Posted by: jussumbody on February 16, 2006 at 9:27 PM | PERMALINK

I forgot this was not a flyover blog. $40K was 25% of what I paid, so it wasn't a small error. I was surprised that changing a bdrm and a bath room into a dining room and a sunroom would add $30K to value, all other things being equal. You really have to look up the number of stars your locality got to know what sort of accuracy they claim for the estimate on your house. San Antonio only got 3 stars, so I'd say they got the reliablity and the estimate itself down pretty well.

Posted by: jussumbody on February 16, 2006 at 9:45 PM | PERMALINK

For those in California, I was wondering about how the property tax is assessed on the recently purchased/built homes, and what will the effect on property taxes be if the market value of these homes fall over the next 5 to 10 years. Would you expect that the assessed values fall and that the property tax will fall as well?

In a word, yes. We don't have "assessed values" any more, except in the most pedantic sense. It's a simple function of the purchase price, so if prices go down, so do tax rates.

But keep in mind that many homes have been lived in continuously by the same owner for decades. So if they sell a house they bought for $30K, for $750K instead of $1million, the "loss" of $250K in assessed value is purely notional. The state will still get more money than before.

People who sell at an actual loss (which is rare, because people don't like doing that, and so only do it if forced to by circumstances) will deprive the state of revenue. But, as I said, I don't think that happens all that much.

And yes, I know someone it happened to also. Please don't present me your anecdote as some kind of analysis.

Posted by: craigie on February 17, 2006 at 12:56 AM | PERMALINK

All of you were nuts who bought in the past 4 yrs, insane prices, mad dogs willing to outbid the next idiot. And this will take the entire economy down with it. Fools who have this need to own at any price, get it we are not owners in this life we are just passing through.

Posted by: Rebecca on February 17, 2006 at 3:54 AM | PERMALINK

The number or stars? I don't want to sound dumb, but where are the stars? As it is, values look about right in my current neighborhood.

But when I typed in my previous address, I found that zillow has two houses on that property, with the almost the same number & same type of rooms. One house has an extra half bath, the other has about 40% more square feet, sits on a lot that's 30% larger (at the same address!), and lists for twice the price. It has apparently increased in value by about 0.5% in the past week. The mind reels...

You really have to look up the number of stars your locality got to know what sort of accuracy they claim for the estimate on your house. San Antonio only got 3 stars, so I'd say they got the reliablity and the estimate itself down pretty well.
Posted by: jussumbody on Feb 16, 2006 at 9:45 PM

Posted by: keith on February 17, 2006 at 5:43 AM | PERMALINK

Take a deep breath and repeat after me:

"My house is not appreciating; my currency is depreciating."

Posted by: CFShep on February 17, 2006 at 8:49 AM | PERMALINK

Zillow was fascinating -- I discovered my family's home in Maryland is now worth about $507,000. And just for fun, I checked out the house where I grew up in Syracuse (there was even an aerial map, which the Maryland house didn't have)...it's now valued at about $64,000 (and in a stable neighborhood, too). As they used to say about MAD magazine, "cheap."

Posted by: Vincent on February 17, 2006 at 11:56 AM | PERMALINK

According to Zillow, my house is valued at 25% less than my neighbor's -- for no apparent reason. The local taxing authority values them the same. Let's hope people don't start using Zillow for real estate negotiations, or a lot of us are going to get screwed for no good reason.

Posted by: trilliumg on February 17, 2006 at 6:32 PM | PERMALINK




 

 

Read Jonathan Rowe remembrance and articles
Email Newsletter icon, E-mail Newsletter icon, Email List icon, E-mail List icon Sign up for Free News & Updates

Advertise in WM



buy from Amazon and
support the Monthly