If you haven’t taken a look at Zillow’s online regional/local housing data in awhile, it’s worth another visit. Zillow has added many new metrics to its offering, as well as additional ways to slice and dice its data.
Housing market data can be viewed at the national, state, regional and local levels. Within these levels data can be compared across a variety of subgroups. For example at the state level housing data can be compared across metro areas, counties or cities. Drilling down, one can then compare zip codes within a metro area, county or city.
Time periods of one, five or ten years can be selected, and data can be filtered on home type (i.e. condos or SFRs) or # of bedrooms.
But the real treat is the expanded number of metrics that can be tracked. As expected, median sales price, median list price, and Zillow’s own Home Value Index are present. But what I really like are the metrics not commonly found on other sites: days listed; number of homes for sale; list price per sq. ft.; sale price per sq. ft.; list-to-sale price ratio; listings with price cut (%); amount of price cut (%); and many more. [Note: Additionally, it appears that foreclosure data will be available soon.]
The graphs are clean, load quickly, and are embeddable. [See the graphs below – created from Zillow’s embeddable code]. On the website, tables accompanying the graphs include the most recent month’s data, as well as M-o-M, Q-o-Q, and Y-o-Y deltas.
To get to Zillow’s local info site, simply go to Zillow.com and then select the Local Info tab at the top. The graphs below are examples from Zillow’s Local Info offering.
For the first graph (below), I chose to compare Zillow’s Home Value Index across the Reno, Carson City and Las Vegas metro areas. It’s interesting to compare the relative declines experienced in the different markets. But more notable is that Carson City home values have been steadily increasing since June.
For the second graph (below), I chose to compare median sales price per square foot across the Reno metro area, including Reno and Sparks. According to Zillow’s data Reno’s median price per square foot looks like it peaked at $210/sq.ft. during the first-half of 2006. Zillow’s most recent data (September 2009) puts Reno’s median sales price per square foot at $115/sq.ft.
Play around with it. If you discover something noteworthy, post a comment.
bob c
i kind of used a rule of thumb—zestimate minus 10% as a rough selling price
seems like some properties are moving ‘at’ zestimate—any comments?
Sean
here is an interesting article regarding property taxes… http://www.rgj.com/article/20091108/BIZ/911080334/-1/news1802
I find it interesting that newer houses are having huge drops in property taxes(including mine which was a 30% drop last year and according to the 2010 assessment just released another 25%) whereas older houses are still getting 3%/year increases
FutureRenoHomebuyer
Those graphs just keep going down. Really picked up steam in 2009, though. Dangerous to catch a falling knife. If it were a stock, I would be waiting, not buying.
We can debate different specifics of the RE data for Reno: number of sales, days on market, govt. incentives, etc…. What really matters, though, is median sales price and the trend thereof. The slope is more negative in 2008 than 2007. The slope is more negative in 2009 than 2008.
There will be no “V” recovery in house prices. Buyers can wait until the slope evens out and starts to form a line of support. I think that the extension of the homebuyer’s credit will cause the fencesitters to back off for now. Next few months should show continued negative comparison’s to previous months and years. Today’s situation seems pretty clear. No need for a panic buy at this juncture.
Next year? In early 2010, I think we’ll see an artificial increase in activity in Mar-Apr, just like we just observed in Sep-Oct (and poss Nov). I don’t see, however, a significant impact upon median sales price, unless it is downward pressure from all the sub-$200k activity.
smarten
Future,
According to Guy the median sales price [at least for SFRs] has been essentially flat for the last five months [according to you, “what really matters…is median sales price and the trend”]. And really, an argument can be made for six-seven months. Therefore either the median sales price is not the determinative indicator of the state of the market as you suggest, or it is and you’re ignoring/sugar coating the data.
I vote for the former because as sales at the lower end of the market price strata slow down [because prices at that strata have already been pushed up]. But we’ll see.
smarten
Clarification. Prices in the lower strata of the market have been pushed up by multiple bids. And more REOs priced above the median are selling. The net effect is that the median sales price is either holding fairly steady, or it may actually increase in the coming months.
FutureRenoHomebuyer
Smarten,
You make good points. Let me try to explain. I’m aware of Guy’s stats showing a stable median over the last several months. But if you look at those Zillow graphs, they just go in one direction, showing no signs of letup — down. There is no leveling off. Perhaps the metrics (home values and median/sq.ft.) are what make the difference.
The other question you raise is whether a stable median price is really an indicator of a stabilization in prices throughout the market. I’m still struggling with this one and am agnostic. On the one hand, price compression at the high end will actually serve to increase the median, but shouldn’t be mistaken for a stabilization in all price strata.
On the other, the market must start somewhere. I’m just trying to lower the bar and open my mind enough to consider the possibility that things are stabilizing. I’ll give the market the benefit of the doubt if it prevents me from becoming a perma-bear who can’t see the turnaround.
In the end, I believe you and I mostly agree. I’ve identified >$400k to be where the generational buying opportunities will come. I’m eager to pick up that nice $800k Reno property at a 50% off sale. Then again, $800k during the bubble wasn’t really $800k, was it? If you know of a metric that will tell me when it is a good time to buy in that range, I’m all ears.
At the end of the day, I’ll likely make my decision in the same way you made yours. I’ll find a property that I really like. I’ll do the research. I’ll give the seller the lowest acceptable offer (or maybe lower). And then I’ll wait.
If he/she ultimately accepts, and I think it’s a fair price (below replacement is a given), then I guess I could really care less what the market median sales price is. Still, hopefully such stats will help me a bit with timing. FWIW.
smarten
Thanks for the clarification Future.
My recommendations [although consider the source], are five fold.
First, stop looking at the median for the market as a whole. I don’t think it’s as determinative of the market as it may have been in the past.
Since you state you’re looking for that former $800K SFR that’s currently available for $400K, if I were you I’d start tracking what has been selling in the $350K-$450K [you don’t want to cast yourself in concrete by making $400K the absolute highest purchase price you’ll look at] price strata of the SFR market. Once you get a better handle on what kind of home you can purchase for the median in that price strata [as opposed to any other strata], I submit you’ll have a better handle on what represents good/not so good value for the type of home you’re looking to purchase.
Second, zero in on the cost/square foot [I really think this is the new market metric]. That’s what I did and only placed potential purchases onto my radar once the price/square foot dropped into a certain pre-determined range. Of course, the replacement cost for whatever it is you ultimately wish to pursue should be higher than your ultimate sales price/square foot – that almost always represents good value.
Third, don’t become a victim to timing the market. You can become paralyzed sitting on the sidelines waiting for the market to reach bottom. None of us knows when that will take, or if it has in fact taken place. You must be willing to act when the right opportunity comes along, even if that means prices in your segment of the market may continue to drop [of course, the opposite may happen as well].
Fourth, unless you’re a Derrick who claims to purchase everything with cash, pay close attention to long term mortgage rates. Be prepared to act on a dip in rates – again compared to where they’ve been over the last year or so. Although I and many others think these rates will remain close to where they’re at for at least the next six months or more, when they start rising [and they WILL rise], your cost of ownership will rise along with them [perhaps offsetting a higher sales price per se].
Finally [and I hope you’ve already done this], position yourself to actually qualify for/obtain the purchase money mortgage you’re going to want to secure. Get a good mortgage consultant you can communicate with [my recommendation is a direct lender rather than mortgage broker]. Make sure you have/can demonstrate at least a 30% down payment. Get your paperwork in order [especially income tax returns if any of your income comes from a source other than earnings]. Prepare schedules to attach to your loan application for REO, income/dividend sources, retirement contributions, etc., etc., that will be simple to update if/when you get to the point of actually applying for a mortgage. Work on cleaning up your credit, assuming it would benefit from cleansing. The difference in loan approval/rates/terms between a 720 and 760 FICO score can be substantial. Finally, I don’t think it would hurt to get formally pre-approved for that $280K+/- purchase money mortgage you’re going to require. Pre-approval generally costs you nothing; lasts for four months or more; and takes another potential impediment to home ownership out of the equation.
Good luck!
Tom
Regarding the usefulness of Zillow’s Z-Estimate formulation of home valuation, here are a few issues I have with their algorithm:
1. Z-Estimate’s formulation is apparently heavily influenced by a particular property’s sales history, and based upon the correlation I have seen, upon the Assessor’s assessed value for a particular property. The basic assessed value, in California, is changed only when a property is sold, unless in an exempt transaction under the rules of Proposition Thirteen, for some sales, which don’t change the assessed value. Thus in California, if a house has not changed hands for thirty years, there is no updated sales history or new assessment. Z-estimate than trends forward on that house, with some adjustments, upon the old purchase price. The result can create a value significantly below a neighboring house, same age, same builder, same amenities and generally the same size, same lot, only difference being the neighboring house was bought and sold recently, thus has a fresh start value and appraisal for the Z-estimate formula to trend upon.
2. Z-estimate draws comps from a radius, with the house being valued located at the center of the circle. Those radius lines extend out mechanically, with no apparent regard for community boundaries, noisy highways near properties within the radius employed, and no consideration of different factors and general neighborhood conditions “across the tracks.” So long as the so-called comps are within the reach of the radius being used, they will be applied.
3. Updated “house facts” may or may not impact the Z-estimate.
4. Zillow’s pronouncements as to its Z-estimate accuracy rates seem to me to overshadow their caveats and disclaimers as to Z-estimate being an estimate or starting point only. The result is that people began to regard the Z-estimate as an accurate third-party estimation tool and use it as a ceiling or limit upon what a selling price should be, as one poster commented above as a rule of thumb.
In my opinion, the Z-estimate has no useful value in a Proposition Thirteen type of jurisdiction when applied to a house that has not been sold for thirty years. That may be a rare case, but when it does exist, it produces an extremely inaccurate valuation for that house, compared to adjacent properties.
I believe Zillow also is not very helpful in a checker-boarded region like certain parts of Los Angeles County, where upscale communities may be surrounded by distressed areas, with significant community boundary lines being certain major boulevards. Zillow pulls in comps from across those boundaries, impacting Hancock Park homes, for example, by reaching into to the totally different neighborhoods to the east and north.
As to a useful estimate of valuation for any particular property, I personally regard the Z-estimate as entertaining but not particularly helpful. It can in fact be problematic, in my opinion, for some California sellers, who are Zillowed with an artificially low Z-estimate because they have lived in their homes for decades.
As to area trends, though, perhaps the law of big numbers evens out those discrepancies, so that the graphs or charts showing trends in a region might be informative as to general directions of movement in an area.
bob c
arrowcreek and somersett are already at 50% of bubble prices…..prop taxes are being assessed downward to a managable level (another 10% in 2010, per a removed posting by the assessor—they
temporarily put up some 2010 assessments and then removed them and even admitted to me on phone they weren’t supposed to release that data yet)
$120/sf to live on the fairway of a golf course/country club with property taxes for
2010 at slightly below fmv (example home….sold
360K 2010 fmv value 340K=low 4000 property taxes–peak price sold 725K in 2005–peak zestimate 800K)
it wouldn’t be the worst decision to pull the trigger on a well priced short sale or repo
TOW
Now that I have closed on my recently purchased condo, I am in the process of making another offer on a short sale (single family)
I will keep anyone who is interested updated on the process. hopefully it goes as smooth as the last one!
3niner
The tremendous property tax increases (of the early 2000s) were just as fraudulent as the pricing bubble, and even more resistant to correction.
A property owner should have the option of demanding that the county buy his/her property for the implied value, when the assessment is too high. The county would have the option of buying the property or forgiving the taxes entirely for that year. This would keep the counties honest, and all these anomalies would disappear in a hurry.
Initiative (in Nevada it’s an amendment) anyone?
3niner
I seriously doubt that there will be either a “V” or even a “U” recovery. So far the US bubble has been closely tracking the Japan bubble, which started around 1990.
If this continues, we can expect inflation adjusted prices to decline more slowly, but continue to do so for a few more years, until a 10% overshoot occurs. After that, moderate increases should be expected.
We are far from the end of this (in years), though most of the price decline has already taken place.
bob c
i was surprised how much the super bubble property taxes had already been marked down……its more like government to prolong the pain, but even a 1.28% property tax rate at fair market value is stiff (3.65 x .35 factor)
nevada needs property tax reform
RMarks
TOW – another question about your first short sale purchase (if you see this!).
How long after the 2nd phase negotiator was assigned did you receive word that your offer had been accepted?
I understand that every purchase may be different but I’m hoping to get a general idea.
You can reply here or email me at renofungi@yahoo.com. Thanks!
FutureRenoHomebuyer
Zillow appears to update its data for these graphs at the beginning of each month. Data as tabulated on 2 Dec 09 is now available. I took a look at a few charts and found some interesting things:
1) Median days listed on Zillow has jumped from 37 in Aug to 106 at the beginning of Nov. You would have thought the expiring (not!) tax credit would have soaked some of that up.
2) Median price sold/sq.ft. (one of Smarten’s favorite stats) continues to trend slightly down and is now at $116/sq.ft. for all of Reno.
3) Almost half of all homes in Reno are selling at a loss (46%, up from ~36% in Jan 09). The trend for such sales is slowly, but continually, increasing.
I’m grateful to Guy for pointing this handy tool out. Lots of insight can be gained by playing around with the graphs. Will be interested to see the trends over the course of this winter.
Guy Johnson
FutureRenoHomebuyer, thanks for the update regarding the Zillow charts.