“American home values dropped $1.7 trillion”
http://money.cnn.com/2010/12/09/real_estate/home_value/index.htm?hpt=T2
Zillow is a very interesting and comprehensive site, in fact I noticed that just last week despite years and years of suggestions that REALTOR(R) organizations take the lead on ratings and reviews Zillow will now take the lead on ratings and reviews. The continued crux of association leadership is the concern that, “what will this do to the agents that get bad reviews?!?” (To answer, push them out of the business hopefully!) However there’s concern with leadership across the board that associations should not take aggressive steps such as ratings and reviews because the concern is on the lowest common denominator and not the high quality agents who are not afraid of public reviews. It’s my opinion that we (as agents) should all be reviewed publicly and be able to counter or challenge basic “troll” attacks. (Troll attacks, people spamming fake, usually negative, opinions or attacks on someone).
OK, so now back to the main article, the first thing that caught me as a probable error in many markets is that the 1st time home buyer tax credit “propped up” the housing market in terms of home values. Not true, it did prop it up in terms of volume sold - but not median housing prices. Most first time home buyers were not buying incredibly expensive houses, and with more activity on the lower-price range the median naturally shifted down, despite the activity picking up. Pretty basic stuff, this happened in Missoula, the activity in certain price points ($0 - $150,000 and $150,000 - $200,000 especially) saw the median shift down, due higher 1st time home buyer activity.
Finally a warning against Zillow, it’s not accurate. In many states and areas it is mostly on target, but in many others it isn’t. Zillow gets its information from some public records and open MLS data. But in many states (Montana being one, there’s 11 others including Texas, Wyoming, Utah, North Dakota, and Idaho). So for our region, even the surrounding states Zillow is not gaining factual data, but usually pulling listing prices from public marketing sites hosted by REALTORS(R). Even in disclosure states, Zillow can miss the mark, your most accurate source of is, and always will be, a REALTOR(R) MLS that has the sales prices and discloses any seller/buyer credits paid, etc - its your best bet.
Quickly lets just see how Zillow stacks up for Missoula, MT. Zillow only represents the median list price ($229,000) which is fairly close, it’s actually $235,000. What they can’t calculate is the more important number, the median sales price. Going back 6 months, for single family homes (detached homes, condos, townhomes) the median sales price is $215,000. The prior 6 months before that the median sales price in a market that was dominated with the 1st time home buyer tax credit saw a median sales price at $195,000. That’s a pretty big shift, and shows that the activity was boosted but the activity was in lower price ranges shifting the median. And then one more number, last year’s median over the same course of time was $204,000.
So Missoula appears to have bucked the trend? Our median price shifted up $9,000 in the course of a year, however once again, look at the overall activity, now post tax credit the activity is now spread across all price points more evenly, which naturally will only cause that median price to climb back up. Basically, don’t believe the hype. When you see this national doom and gloom news keep in mind these Zillow calculations don’t reflect on “us” in Missoula (or Montana) at all. Additionally shifts in median values don’t always equate to lost value in homes. Our markets are incredibly segmented right now (see my prior posts on stats within price-points) and it really is true when we say real estate is local. These national stories are way to generic to reflect on our actual market.
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