Zillow Advice: Home Buying - Purchase Prices rising or falling? http://www.zillow.com/advice-thread/Purchase-Prices-rising-or-falling/391994/ Zillow Advice | Zillow Real Estate Here is a curve fit using ... http://www.zillow.com/advice-thread/Purchase-Prices-rising-or-falling/391994/ Here is a curve fit using $100k bins, for the first half of 2010 sold Single Family Residences, showing up to $10 million sales.&nbsp; It addresses some of the $1 million and above properties better, but loses a lot of the detail in the under $500k range.&nbsp; The correlation coefficients are much higher, but that only means that the detail was lost in creating such wide bins.&nbsp; $100k make a huge difference to people in the under $800k range.&nbsp; $25k bins is much more appropriate for all analysis up to $1 million.&nbsp; The chart still shows the curve fit missed the sales in the $2.5 million, $3 million, $5.5 million, and $6 million range.&nbsp; Even with bins as wide as 1/4 million, these still would not be accommodated with one additional normal curve, so $100k bins are still appropriate; but at least 3 more normal curves needed, bringing the total to 10.&nbsp; I'm presently considering fitting to 12 normal curves, and providing additional restraints on the solver to keep them in the approximately same initial range.<br/><br/><img src="http://photos1.zillow.com/is/image/i0/i6/i946/ISf5e4cnhs5pyb.jpg" width=" 481px" height=" 287px"/><br/><br/>Web address to read numbers:<br/>http://photos1.zillow.com/is/image/i0/i6/i946/ISf5e4cnhs5pyb.jpg Sun, 27 Mar 2011 05:02:00 GMT http://www.zillow.com/advice-thread/Purchase-Prices-rising-or-falling/391994/ 2011-03-27T05:02:00Z Nerd :-)Great info if I was ... http://www.zillow.com/advice-thread/Purchase-Prices-rising-or-falling/391994/ Nerd :-)<br/><br/>Great info if I was still living out there and having to make a decision on real estate out there. Thu, 24 Mar 2011 20:03:00 GMT http://www.zillow.com/advice-thread/Purchase-Prices-rising-or-falling/391994/ 2011-03-24T20:03:00Z Overlaying the Zillow "Local ... http://www.zillow.com/advice-thread/Purchase-Prices-rising-or-falling/391994/ Overlaying the Zillow "Local Info" trends with the curve fit trends for under $1 million:<br/><br/><img src="http://photos2.zillow.com/is/image/i0/i6/i415/ISfbmsij8ycdr7.jpg" width=" 468px" height=" 305px"/><br/><br/>Web address to read text:<br/>http://photos2.zillow.com/is/image/i0/i6/i415/ISfbmsij8ycdr7.jpg<br/><br/>Obviously, the present listed prices are "high", but then a large portion of what is "for sale" is not listed on Zillow (for whatever reason).<br/><br/>It is interesting to see how well the curve fit trends for these lower median "sold price" ranges lines up with the median trends of "values" provided by Zillow.&nbsp; But obviously, and upper, lower and middle tier, and a SFR median are "over simplification" and not sufficient, especially if one is interested in the market dynamics of the $1 million plus range.<br/><br/>I keep "hoping" that I can extrapolate the distribution curve just from the Zillow trend data; but it is not clear that can happen.<br/> Thu, 24 Mar 2011 19:14:00 GMT http://www.zillow.com/advice-thread/Purchase-Prices-rising-or-falling/391994/ 2011-03-24T19:14:00Z Here is the Z-index trend ... http://www.zillow.com/advice-thread/Purchase-Prices-rising-or-falling/391994/ Here is the Z-index trend (median estimated value), Upper tier median trend (upper hextile), Lower tier median trend (lower hextile), and SFR median trend, from Zillow's "Local Info" pages for comparison:<br/><br/><img src="http://photos3.zillow.com/is/image/i0/i6/i400/ISfbt4ly5fl2g3.jpg" width=" 469px" height=" 373px"/><br/><br/>Web address to read the numbers:<br/>http://photos3.zillow.com/is/image/i0/i6/i400/ISfbt4ly5fl2g3.jpg Thu, 24 Mar 2011 18:05:00 GMT http://www.zillow.com/advice-thread/Purchase-Prices-rising-or-falling/391994/ 2011-03-24T18:05:00Z Here is the traditional LogNormal ... http://www.zillow.com/advice-thread/Purchase-Prices-rising-or-falling/391994/ Here is the traditional LogNormal Distribution Curves for comparison:<br/><img src="http://photos2.zillow.com/is/image/i0/i6/i334/IS1iq3qix3f04o3.jpg" width=" 479px" height=" 340px"/><br/><br/>Web address to read text:<br/>http://photos2.zillow.com/is/image/i0/i6/i334/IS1iq3qix3f04o3.jpg Thu, 24 Mar 2011 04:30:00 GMT http://www.zillow.com/advice-thread/Purchase-Prices-rising-or-falling/391994/ 2011-03-24T04:30:00Z Here is the same chart with ... http://www.zillow.com/advice-thread/Purchase-Prices-rising-or-falling/391994/ Here is the same chart with the present listing price distribution superimposed:<br/><br/><img src="http://photos3.zillow.com/is/image/i0/i6/i333/ISfclaeoi7v0df.jpg" width=" 471px" height=" 329px"/><br/><br/>Web Address to read numbers:<br/>http://photos3.zillow.com/is/image/i0/i6/i333/ISfclaeoi7v0df.jpg<br/><br/>Other than the changes in some of the peaks, the major difference you will notice is that not all of the presently for sale homes are listed as the magnitude of available homes is way too small. Thu, 24 Mar 2011 03:33:00 GMT http://www.zillow.com/advice-thread/Purchase-Prices-rising-or-falling/391994/ 2011-03-24T03:33:00Z Is there any way on Zillow ... http://www.zillow.com/advice-thread/Purchase-Prices-rising-or-falling/391994/ Is there any way on Zillow that I can 'follow' you, Pasadenan, or get an email alert when you post something?&nbsp; Thu, 24 Mar 2011 03:32:00 GMT http://www.zillow.com/advice-thread/Purchase-Prices-rising-or-falling/391994/ 2011-03-24T03:32:00Z Here is a chart overlaying ... http://www.zillow.com/advice-thread/Purchase-Prices-rising-or-falling/391994/ Here is a chart overlaying the SFR housing sold price distribution curves for better visual comparison of the distribution shift:<br/><br/><img src="http://photos1.zillow.com/is/image/i0/i6/i333/IS1iq3pvco4kjab.jpg" width=" 468px" height=" 326px"/><br/><br/>Web address to read numbers:<br/>http://photos1.zillow.com/is/image/i0/i6/i333/IS1iq3pvco4kjab.jpg Thu, 24 Mar 2011 03:09:00 GMT http://www.zillow.com/advice-thread/Purchase-Prices-rising-or-falling/391994/ 2011-03-24T03:09:00Z So, what does this mean the ... http://www.zillow.com/advice-thread/Purchase-Prices-rising-or-falling/391994/ So, what does this mean the answer to the question is?<br/><br/>It depends on market sector price range; but for most, it has been falling and still falling.&nbsp; The one of most interest to follow is the $1 million range as apparently that wasn't affected by the bubble deflation yet.<br/><br/>It will also be interesting running a similar curve fit on Zillow's estimate for all SFR housing stock in Pasadena, but that is much harder to do due to methods of getting the data for about 33k housing units.&nbsp; (Probably about 25k SFR units, but not checked yet).<br/><br/>The big issue with running the curve fit on the estimated values is the above $2 million range is known to be estimated substantially low.&nbsp; But only by looking at all housing can one get a true picture of "change in value" instead of just change in what is available for sale.<br/><br/> Wed, 23 Mar 2011 20:21:00 GMT http://www.zillow.com/advice-thread/Purchase-Prices-rising-or-falling/391994/ 2011-03-23T20:21:00Z You will note there appears ... http://www.zillow.com/advice-thread/Purchase-Prices-rising-or-falling/391994/ You will note there appears to be an "extrapolation" on the chart for this year...&nbsp; That is actually a curve fit of "list price" of what is presently listed on Zillow for sale, thus not a very good measure of what things will actually sell for over a 6 month period.<br/><br/>The dates used on the chart is the middle of the 6 month "sold prices" used, and for the "list price", is 3 months from the time of obtaining the listing data.<br/><br/>As can be seen, the 4 lower ranges were falling, but are almost flat now, with the bottom one experiencing a slight rise.&nbsp; The top range dropped slightly through 2009, but experienced a slight rise for the beginning of 2010, but a substantial fall at the end of 2010.<br/><br/>In about the $1 million range, there has been a steady increase.<br/><br/>In about the $1.5 million range, there was a substantial drop, then a substantial rise, and then a substantial drop again.<br/><br/>This could be due to the small number of units sold in that range, or it could be due to not using enough normal distributions in the curve fit and thus accidentally jumping from one range to a different range.&nbsp; This will require more research.<br/><br/>And then, there is the question of how much "market share" each of these ranges is receiving...<br/><br/>Thus, the magnitudes are compared as "percent of market" over time:<br/><img src="http://photos3.zillow.com/is/image/i0/i6/i308/ISfcw038ztz99f.jpg" width=" 471px" height=" 358px"/><br/><br/>Web address to read numbers:<br/>http://photos3.zillow.com/is/image/i0/i6/i308/ISfcw038ztz99f.jpg<br/><br/>Obviously the higher price ranges remain at very low percent of market share. The interesting one is the about 1.5 million range that saw some increase in market share, and then rapid decrease in market share, implying the assumption of jumping between market ranges on the curve fit is correct.<br/><br/>The lowest range saw a rapid increase, mostly due to the deflation of the bubble causing more housing to be available in that price range and the government "tax incentives", and then a decrease to about 18% market share.&nbsp; The listing data indicates 30% of the market is presently in that range.<br/><br/>The second lowest range was 50% of the market in 2006, but declined to 14.5% of the market in 2009, and back up to 15.6% of market first half of 2010, and down to 6.6% of market for the end of 2010.&nbsp; Presently, this segment is 21% of listing market share.<br/><br/>The 3rd and 4th market range saw an increase in market share from 2009 to 2010, but for the end of 2010, the 3rd range made a rapid increase taking 56% of market share, and the 4th market range took a dive to 9% of market share.<br/><br/>Those listed presently in the 4th market range is 35% of the market, which is close to the 33% of market from 2006.&nbsp; Those listed presently in the 3rd market range is 8% of the market which is substantially above the 1.8% of market from 2006 and 2.7% of market from 2007.<br/> Wed, 23 Mar 2011 20:13:00 GMT http://www.zillow.com/advice-thread/Purchase-Prices-rising-or-falling/391994/ 2011-03-23T20:13:00Z