Dan is correct. In fact politicians (and the NAR that funds them) created the head-fake that made the housing crash appear as two episodes. Without that commission-creatin' uptick, it would have just been one long slide back to reality.The market is inexorably returning house values to a credible relationship with incomes levels. A good next step would be getting rid of the home mortgage deduction. Effectively paying people to buy houses is an economic perversion, and as we've now seen, getting as many people as possible to take out mortgages on houses does not create stable communities.
I think this is about getting someone to buy Zillow, not about "improving" it. Somehow the goal is to make it more appealing, either to advertisers (to make it temporarily more profitable) or potential buyers.Or maybe the plan is to make it so disruptive that someone will buy it just to make it stop. ;)An older article, but on point.http://gigaom.com/2010/01/13/zillow-ipo/I would say though, that the Zestimate "history" charts have been changing all along; they were never documenting Zestimates as fixed in time. I was writing down Zestimates for certain properties as I began tracking them, thinking those would be benchmarks. Wrong.
Regarding the new-inflated Zestimate for our (rented) house: they almost seem to have factored in the owner's ridiculous wishing price from a year or two ago -- and it was on Zillow.
One might think that when houses are on the MLS with asking prices 100K+ below the Zestimates, something might be learned from that.I can see where a new formula might change a Zestimate abruptly (of course, in reality the market value didn't change overnight). But shouldn't an "improved" calculation bring the figure closer to reality, rather then sprinting away from it?In this house, the previous Zestimate guessed its to be worth at about it's 2001 value. Now it shows a current value equivalent to that of late 2005! Seems like that kind of result could have been automatically red-flagged.
The zestimate for the house I am renting went from about $300K to $450K overnight, and similar silliness throughout the neighborhood. $300K was a best-case-finding-a-chump price in our market.So it's gone from fairly accurate to absurd. Is there increased weight being given to "owner"/realtor representations of improvements?I don't know, but right now I'm feeling that Zillow has jumped the shark as far as being a buyers' tool. Perhaps the new business model is to join forces with the REAs to generate income.
Forget about a "rebound," if by that you mean a re-inflation of the bubble. Prices are resetting to levels that are in line with incomes, and when interest rates are allowed to rise, a given payment will support a smaller loan - and prices will be driven down even more.In the last 4 years of listening to Realtors say "it's a good time to buy," I've watched house values in my area fall 50% or more. All independent analysis that I see makes the reasoned case that 2011 is a good year to keep leasing. All signs point to my landlord losing equity faster than I will pay him rent -- not even counting the taxes, insurance, HOA and upkeep.As for the "real estate is local" lines... Realtors: we don't need you to tell us about local pricing trends -- we can see transaction records right here on Zillow.
The Media isn't crazy, it's just late, as usual. The credible analysts have been predicting some version of the "end of the world" for years now, and so far they've been right.Typically, most REAs here have exactly the wrong read on low interest rates, too. Low interest rates are not a buy signal, just the opposite: the house you buy today will drop in market value as interest rates rise (as future buyers will only qualify for smaller loan amounts).----Does anyone else sense that the government's buyer incentive programs may have burned through the supply of gullible buyers, and the remaining pool is too smart for the same 'ol BS?
No.Who am I? A guy who sold at the top of the market in 2006, pocketed the profits, and still has all of it because I didn't listen to the house salesmen who would have happily advised me buy another house in 2007, 2008, or 2009...The truth few people want to say aloud is that a house ownership is going to be one of the worst strategies for building (or keeping) wealth going forward. Most middle-class-and-under folks will be smarter to rent and save their money, and invest it almost anywhere else. Hard times are still ahead: cash will be king, houses will be albatrosses.Seven Reasons Not to Buy a Home.
There need to be reasons for prices to go up, not just the passage of time. Huge inventories, visible and hidden; buyers AND sellers with tremendous debts, high unemployment, higher taxes coming, general pessimism about the future.IMO, the economic recovery probably can't even begin while Obama is in office, and therefore we can count on house prices continuing to fall. 5 years is not a bad guess..
These recent comments make sense to me; I think more and more underwater householders will be doing the math.Still renting here -- for 3 years since selling our house. Still, friends and family ask when we're going to buy, and opt for "stability." I do the simple math in my head: yes, I'm paying another year's rent, but in the last year, my landlord's property has depreciated by at least the total amount of annual rent, and that's before counting the taxes, insurance, HOA dues and repairs that he's had to pay (never mind his neg-am loan on the place!). He avoids just doing the math-- or he can't bring himself to admit keeping this place has been a BIG mistake for him.