Random Valuations

A headline story from Zillow:  Negative Equity Continues to Fall, Concentrated in Bottom Tier

The Wall Street Journal reported on the story:  Mortgage, Home-Equity Woes Linger

CNBC reported the story as well: The most sought-after homes still underwater.

Even my cyber-friend Calculated Risk reported on the story:  Zillow: Negative Equity declines further in Q1 2014

Before you waste any time on worthless data, just go to Zillow’s website and search for your own home, or a rental, or any property that you know something about.  Look at the value of the property and that of the neighboring properties.  Are you done laughing?

Zillow’s estimates of value are totally random.  Worse yet, they are not consistent.  Some are too high, some are too low, often by huge margins.  This is the data base that they are drawing their analysis from.

It is comical and acceptable to see someone like Susan Wachter, a real estate professor who has never worked a day in the business, giving a very solemn opinion on CNBC about this fact-free data.  It is quite scary to think that Janet Yellen and the FOMC may be looking at the same press releases and formulating policy decisions based on them.  

In closing, I have nothing against Zillow.  They are a commercial website that has greatly contributed to the real estate business, but they are not the Census Bureau.  

 

hovelThis wonderful view can be yours for as little as (insert fantasy number)! May need a little fixing.

(Photo via intuyuconsulting.com / Author unknown)

 

non-traditional

Slightly non-traditional, but offers great view of the airport. Ideal for flipping.

(Photo via sietske-in-beiroet.blogspot.com / Author unknown)

 

visko

Own this palace in the woods and feel at one with nature!

(Photo via trekhimachal.com / Author unknown

 

Z

The market still loves Zillow – via BigCharts – click to enlarge.

 

Ramsey Su was a real estate broker who specialized in all aspects of foreclosures.  His career started during the Volcker era in the early 1980s.  In addition to acting as broker for bank owned properties, Ramsey also acted as consultant, court appointed receiver, manager for distressed properties, work outs and as a real estate investment adviser.  Currently, Ramsey is an independent analyst, focused on the rapidly changing world of real estate today.

 

 

 

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3 Responses to “Beware of Totally Useless Real Estate Data”

  • Calculus:

    Jim

    Assuming the valuation is right you’re only $120k richer if you either move down (from say a 4bed to 2 bed) or you move to a cheaper area. If you want to move to another house in the same area (that’s not smaller) then you haven’t made a penny, the extra increase in value will be reflected in the property you want to buy. And if you want to move to a more expensive house (say 6 bed instead of 4) you’ve actually lost money as you’ll have to fork out far more than if the value of your property had decreased.

    Summary: Property price increases often hurt people far more than first seems.

    • RedQueenRace:

      ” If you want to move to another house in the same area (that’s not smaller) then you haven’t made a penny, the extra increase in value will be reflected in the property you want to buy. ”

      Apparently, according to Zillow, that’s not necessarily true !

  • AustrianJim:

    I looked up my house on Zillow and discovered I am about $120K richer than I thought I was. Hope they’re right!

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