Sorry to spoil the party, but we're not at the bottom!

Mark, you asked about the methodology on my negative equity statistic. Basically we look at the Zestimate for almost every home in America right now and we compare that with the amount of the originating mortgage(s) at the time of purchase. We assume that no new debt was put on the house, and that no principal was paid down -- both of these are pretty standard assumptions for companies that calculate this sort of thing. We arrive at ~ 1 in 5 homeowners with negative equity (including those without a mortgage -- it's even worse for those with a mortgage, obviously) or about 20 million homes.

Jim, you asked why the $15K tax credit didn't make its way into the final stimulus bill. Simple politics. It actually really surprised pundits because it looked like it was in until late in the negotiations. I expected it to be in there at the end, but it didn't happen. I haven't seen a good recounting of why it didn't get through. Maybe we should ask NAR! ;)

Let me try to clarify my perspective on the current housing situation. I was trying to make three points in my media interviews today.

First, Zillow's data (and my opinion) is that home prices have further to fall in almost every major city, and certainly at the national aggregate level. Home values will decline from today's levels because of new foreclosures and short sales, as well as an inventory glut from homes already on the market. New job losses will also contribute. Additionally, there are still a lot of ARM resets coming (I don't recall the specific number) which will create a whole new group of distressed sellers, unable to cover their mortgage obligations and unable to refi because of negative equity.

Second, Zillow's data shows a significant amount of homeowners have negative equity -- about 20 million homes, or about 1 in 5. Six months ago it was 1 in 7 homeowners that had negative equity. As you know, negative equity is a serious issue for a homeowner because they can't refi with negative equity, and they can't draw down from a HELOC which means they can't fuel personal consumption off of their equity. Third, there is a massive amount of "shadow inventory" waiting in the wings, which will come online as new listings when the housing market starts to turn. Conservatively, there are about 20 million homeowners who are basically waiting to list their home. About 1/3 of homeowners say they're at least "somewhat likely" to list their home in the next 12 months if they see "an improvement in the housing market". Using that 1/3 number would get us in the 30 million range, so I'm being conservative when I say about 20 million. As you probably know, there are about 4 million homes for sale now. The reason this "shadow inventory" matters a lot for all of us is that it will stall a recovery, because new listings will come on the market to sop up any new demand that comes. As a result, we'll see an "L-shaped" recovery, rather than a "V-shaped" recovery.

OK, so now that I've thoroughly depressed all of you....

First, what advice would I give to owners? Refi if you can, and don't sell if you don't have to.

To renters and first-time-homebuyers? Buy! Even though this probably isn't the bottom of the market, if you're going to stay in your home for a few years it doesn't matter that much. And timing the bottom precisely is impossible anyway. So take advantage of the huge amount of inventory, the low prices, the attractive financing, and the government subsidy of your first time home purchase.

To sellers: if you want to sell your home, price it correctly (which is probably lower than you'd like).

And finally, to real estate agents: Homeowners, buyers and sellers are terrified in the current environment. They need your help more than ever -- you're like a doctor to them in the midst of a health care epidemic. Educate, console, counsel, and you'll be invaluable to your clients. And of course, most of all, remember to market yourselves online because that's where your clients are.

Lee, More data and graphs than you'd ever want can be found here. Click on the little graph icons next to each city name.

Lane, you wrote "And when are you guys going to put your error data ON Zestimates instead of making it cryptic and a click or three away?" Well if we knew the error rate on a specific Zestimate, we'd just adjust the Zestimate so the error was zero!!

We only know the error rate on a Zestimate once the home sells, and we do show that on the home details page. For example, here's a home in my neighborhood which just sold for $1.475M. The current Zestimate is $1,466,500 (as of 5/6 -- remember, we do Zestimates 3x per week). Click on the "Zestimate & Charts" section on the left side of the page and it will take you here.Notice that the previous sales of the home are shown on the graph so you can see what the Zestimate accuracy (the line in the graph) was at the time of each sale. In this home's case, it looks like the Zestimate was very accurate at the time of the 2/27/09 sale but our Zestimate was way too high at the time of the 2005 sale.