Cracked Glass Found in Home Prices Crystal Ball

Real Estate Prices Crystal Ball


Who doesn't want to know what will happen in the future? That's a very small group, for sure, since good planning is a cornerstone of good management -- for households as well as for organizations of every kind.

So, whenever Wyckoff homeowners see headlines like “Home Prices Up 'Unsustainable' 5.9% in 2012,” above a MarketWatch article that explains that price growth is expected to slow, they probably would like to gauge the reliability of the forecasters.

In this case, MarketWatch is part of the relatively stalwart Wall Street Journal, so credibility goes up. But closer examination finds that the author is just reporting information real estate site Zillow compiled. Zillow is indeed an internet behemoth -- but can Wyckoff homeowners rely on its national predictions to gauge Wyckoff home prices?

My own take is to find out how well has this source done in the past…

Looking back a very short while ago (to December 26 of last year), I find that Zillow's survey of 100 economists and forecasters “said they expect home prices to increase in full-year 2012 by 4.6%.”

Hey! Hold it! This is only February, but now the same outfit is telling us that the actual home prices gain last year was 5.9%. Doing a little arithmetic, it seems that the 100 economists and forecasters, faced with the task of estimating home prices for a year that had just a week left, were off by 28%! (They also acknowledge that the same panel had predicted the rise would be 2.3% only three months earlier).

So I guess it's not that surprising that they feel home price rises like last year's are going to be 'unsustainable' in 2013. Apparently the actual home prices were unsustainable last year, too!

Since real estate and home prices in Wyckoff are inherently local, it takes on-the-ground expertise to keep up with them.  If you'd like to know where your home falls in today's market, contact me now to schedule an initial consultation.  I think we're getting ready for an interesting spring season --and I'd love to help you explore your options!


Matthew De Fede SFR & CNE

COLDWELL BANKER Residential Brokerage

 

 

22 Comments on Does Zillow & Trulia Have A Problem Telling The Truth About A Home?

20 Most Recent Comments Displayed Show All

FEB
18
814,529 Points 13 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Actually at Raincamp a Zillow representative told the audience that Zillow reserves the right to a 20% margin of error ! imagine if we did CMA's that way ??????
6:22am • #3
160,191 Points 7 Featured Posts Hit Router

Yes I was there and saw that!
6:32am • #4
128,513 Points

Another reminder that all real estate is local.  National algorithims are are worth looking at, but it is still our job to deal with reality.
6:44am • #5
836,541 Points 69 Featured Posts Outside Blog Called Shot Master

Of opinions there is no end...I am looking for the person who KNOWS what they are doing and talking about. Results follow after that..

 
7:06am • #6
535,758 Points 71 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Real estate is hyper-local. There are neighborhoods in my market where you can price high and they will sell. A mile down the road homes are languishing on the market.

 
7:20am • #7
139,547 Points 3 Featured Posts Outside Blog

You're preaching to the choir Matthew.  

The easy access to supposed home values and market information makes the national sites appealing to many buyers and sellers but the reality is that all real estate is local and "boots on the ground" knowledge from local experts is where the genuine information  lies. 

Unfortunately because of their national exposure and ability to spread their message on a wide scale, we have to refute their incorrect information at every turn.
7:28am • #8
235,660 Points 1 Featured Post Called Shot Master

It is the REal Estae Profession that has lowered it's standards by using these off breed sites and drive the consumer there instead of to the tried and true information of the REal Estate expert. 

Realtors...WAKE UP!
8:06am • #10
869,386 Points 200 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

I'm still shaking my head at Michael's comment #3. There business model and premise of existence can't possibly last the test of time.
8:42am • #11
466,050 Points 50 Featured Posts Called Shot Master

Attorneys use zillow to price homes, no kidding. Why ask a Realtor® when anyone can get the information for free?!!!
9:08am • #12

The numbers that we receive are not very believable. NAR lied last year by 15% of their upswing. We are in this mess becasue we cannot even remember last month. We just want to hear good news like little children. We are the problem of our own problems.
9:36am • #13
428,099 Points 23 Featured Posts Outside Blog Called Shot Master

No one reads the fine print in the Zestimate where they list their margin of error.  As indicated in #13, NAR's numbers can be off as well. Buyers and Sellers need to work with a local agent who knows the market....and stop paying attention to all the noise.
10:46am • #14
1 Featured Post Outside Blog

Bottom Line is nobody knows the value of a home like a LOCAL Real Estate Professional ... nothing can take the place of their experience and knowledge.
2:07pm • #15
700,329 Points 39 Featured Posts Outside Blog Called Shot Master

I think that you should blast this 'error' across the planet & back. I can't see how the WSJ can quote any type of predictions from Zillow considering their error rates.  Great job on this post to set the record straight.
2:09pm • #16
189,071 Points 1 Featured Post

How come you don't mention REALTOR RPR (replace professional realtors) computer generated home values system in your slam?
3:10pm • #17
378,625 Points 5 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Matthew, 

We just had an investor client argue our rental valuation for a high end home because "Zillow says XXXX".  Well, in doing analysis on most of the 30 executive homes we leased, Zillow was under by 28% on average.  

It's not a crystal ball, knowing your local market will always take in more intangibles than Zillow or Trulia can.  

Having said that, it's a guidepost, I just don't spend all day on their sites.  

All the best, Michelle
5:25pm • #18
521,882 Points 10 Featured Posts Outside Blog Called Shot Master

Lawrence Yun et al are more Fortune Tellers than Economists.

And the Zestimate is nothing but a WAG.

 
6:01pm • #19
139,022 Points 3 Featured Posts

Good post. You post is the exact reason why we as Realtors must talk to our clients straight up and back those words with hard data off of what has happened in the area of their home. Nothing like boots on the ground to get the right answers
6:26pm • #20
1,348,414 Points 41 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Matthew - Real estate is certainly local, and even Zillow admits that buyers and sellers should be contacting a local expert.
10:14pm • #21
876,517 Points 10 Featured Posts Attended Rain Camp Called Shot Master

Zillow says....this is the current market value so...

Whereas an expert says it's off by as much as 20% - so question would be, who should you believe?

Of course Zillow experts.
11:17pm • #22
392,656 Points 5 Featured Posts Outside Blog Attended Rain Camp
Buyers should first learn that all real estate is local, then find a local trusted adviser.
11:57pm • #23

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Matthew-defede Rainmaker_large

Matthew DeFede, Wyckoff Real Estate "Specializing in NYC Commuters"

Matthew De Fede

Wyckoff Twp, NJ

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Coldwell Banker Residential

Address: 327 Franklin Ave, Wyckoff, NJ, 07481

Office Phone: (201) 891-6700

Cell Phone: (862) 228-0554

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Looking to buy or sell a Home in Bergen County New Jersey? Wyckoff, Franklin Lakes & Ridgewood NJ http://www.allwyckoffrealestate.com


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