Zillow Weep for Me

[34f3f3f]

Whenever I get bouts of depression it’s off to Piggingtons with prescription in hand for antidepressants. My recent angst is brought on my discovery of Zillow.com, that has sent my confidence in a downturn in house prices into utter disarray. I don’t see those lovely cascading waterfall graphs, that have come to represent the raison d’être for some of us, but a nagging insistence that prices have been on the increase for much of the year, and aren’t letting up soon. Someone please tell me that Zillow is the Realtor’s propaganda weapon against dissenters.

[aztecnology]

Zillow in Southern California is highly inaccurate. I can look at 2 different neighborhoods of regular tract homes that are a few blocks from me, and show you houses that are next door to each other with Zestimates that span a $600,000 and $300,000 price difference in identical homes…

[(former)FormerSanDiegan]

Are you in San Diego ?

Here’s a Zillow eval on my rental house, along with the zillow chart for the zip code and San Diego as a whole.

All are decidedly DOWN.

[img_assist|nid=1872|title=Zillowed|desc=|link=node|align=left|width=100|height=61]

[34f3f3f]

That’s cheers me up 🙂

[34f3f3f]

Unfortunately, I am not in San Diego but am interested in the area. My views were actually pretty general (SoCal) and not based on San Diego. Thanks for the chart.

[waiting hawk]

Zillow is a joke. Here is a house I was tracking in Temecula. It’s a $100k off.

Price Reduced: 07/18/06 — $497,990 to $489,000<--Greedy in a declining market Price Reduced: 07/20/06 -- $489,000 to $479,000 Price Reduced: 07/26/06 -- $479,000 to $471,500 Price Reduced: 08/02/06 -- $471,500 to $458,990 Price Increased: 08/07/06 -- $458,990 to $489,000<--- ?? Price Reduced: 08/12/06 -- $489,000 to $447,500 Price Reduced: 08/31/06 -- $447,500 to $439,000 Price Reduced: 09/13/06 -- $439,000 to $438,999 Price Reduced: 09/15/06 -- $438,999 to $424,990 Price Increased: 09/20/06 -- $424,990 to $427,215<--- ?? Price Reduced: 09/23/06 -- $427,215 to $424,990 Price Increased: 09/25/06 -- $424,990 to $427,215<--- ?? Price Reduced: 09/29/06 -- $427,215 to $424,990 Price Increased: 10/02/06 -- $424,990 to $427,215<--- ?? Price Reduced: 10/03/06 -- $427,215 to $419,000 Price Reduced: 10/05/06 -- $419,000 to $408,990 Another great part is Zillow's zestamite at $513,609 (close?)

[34f3f3f]

Does anyone actually know how Zillow figures are compiled? Their site says they collect data from “home sales from the municipal office responsible for recording real estate transactions.” The prices seem in keeping with realtor.com and they say the website is only in Beta stage, so is still being developed.

[PD]

It also takes a while for new comps to show up in their estimate. I kept checking zillow for the sale price of house that I knew sold in August. The sale just showed up on zillow a week or so ago. The seller had been asking 585k and took 535K. Plus, I don’t know what incentives they gave the buyers. They probably could have gotten 585k at the peak.

[PerryChase]

Perhaps Zillow aims to estimate what the home would appraise for, not necessarily sell for.

[VanMorrisonFan]

I have a background as an appraiser (though I am not doing it now), so maybe I can help with the difference between Zillow and listing prices.

In “down” markets, sale prices will always lag listings, especially when sales are slow. I don’t envy appraisers in this market. What do you do in a neighborhood where you have three sales that may be four months old and three listings at prices lower than the sales would indicate? You know the sales are not an accurate reflection of current value…but what is?

Conventional wisdom is that listings determine the bottom end of the value range – i.e., the value of a home cannot be less than the asking price of similar homes in the area. However, in a very slow market, listings aren’t an accurate indicator of value, especially if people listing homes have not “faced the music” and recognized where the market REALLY is. That’s my hunch of where the market is right now – massive mismatch between where the sellers want to sell and where the buyers want to buy.

This mismatch will probably last until foreclosures start. Lenders hate holding properties – they aren’t set up to be landlords, they have to add staff to do it, etc. etc., so they will dump properties for what they can get for them. I appraised commercial real estate in the last huge So Cal downturn and I was shocked at how banks dumped properties.

[guitar187]

As a mortgage broker for over 10 years, I can tell you for fact that Zillow is a poor chice to find home values anywhere in the country. The numbers are simply inaccurate.

[34f3f3f]

That’s interesting. What you are saying is that a slow market (presumably like the one we have entered) creates a discrepancy between listing and actual sale prices. It makes sense, but how much is that really about people facing the music?

When you say “when foreclosures start”, do you anticipate that happening wholesale soon?

[34f3f3f]

Do you think they are misleading in any direction ie too high or too low, or accross the board?

[guitar187]

I have evidence that they are both high and low (but usually high). I’ve had many Loan Officer’s using Zillow in their intitial conversations with borrowers. But we’ve found that degree of inaccuracy is not suitable to a good prequalification.

[SD Realtor]

Qwerty –

As a realtor I do not hold much stock in Zillow and never did. Do not get to bummed out. If you really want to know what is going on then focus on the exact area and the exact type of housing and ask a Realtor or someone with MLS access to start tracking the listings for you. I think Zillow is a nice tool for people to get more information on the market but I could not comment on the accuracy of it.

Also I think in general the market is going to do what it will do. We all, (including me cuz I am a renter and I need a bigger home) want the market to slide down fast. However it may or may not do that. Yes inventory is sky high and yes sales have declined which is great. However for many reasons that has not translated to the price declines many of us WANT to see. However, in alot of certain types of housing I HAVE indeed seen big price drops. Not in the areas or types of homes I want but something is better then nothing. The other night I got some email from a good guy who posts here every now and then and we were trying to figure out why the market hasn’t tanked like it should. I commented that my wife is gonna kill me if it doesn’t indeed tank so maybe next year on my headstone it will read “he died waiting for the downturn”…

Real estate cycles are slow slow slow…

Anyways get your data from someone who can give you accurate stuff. You want to know what is active, what is pending, average market times, recent solds, recent expireds and cancelleds… When you want to really start to assess what is going on in the area you are thinking of buying in, then start gathering data and tracking stuff.

[Author]

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