Thursday, April 24, 2008

More on Nagle...

So, just to give y'all a little more perspective on the Nagle listing (see earlier post), I cut out the Zillow graph for you. They've got this house priced at late '03 rates ($585k). I know a lot of you think we'll be seeing '01 prices before too long and I don't necessarily disagree with you but late '03 pricing is still a breath of fresh air.



Note that Zillow is throwing out the foreclosure sale price at $789 because Zillow can't believe how low it is. Ha! Believe it Zillow! Believe it because it's going to sell for about $200k less than that.

Once this house sells, which should be any minute now, it'll be interesting to see whether the value graphs for the neighborhood plummet or not.

7 comments:

Anonymous said...

Hi, it's David G from Zillow.com,

We currently ignore all foreclosure transactions because foreclosures are typically not a measure of market value (in a normal market.) In a normal market, Realtors do the same thing when setting prices. It would typically be stupid for a seller to comp their home against foreclosures. Now, however, there are so many foreclosures in some areas that sellers have to compete. This is no "normal" market; at least in SoCal and elsewhere. Foreclosure inventory is so incredibly high in places like San Diego that foreclosures literally are the market. Pretty scary. Banks don't have the same motivation sellers do to hold out for their price. It's not hard to imagine that some markets are literally in free fall until the foreclosure inventory drops. Our analysts are actually reviewing whether there may be a way to identify and account for this phenomenon but for now, Zestimates ignore foreclosures.

Anonymous said...

Hey David G- get used to foreclosures being the measure of the market. Hate to tell you, but the "zillow way" of assessing the market is over!

Anonymous said...

Hi David G.

As a potential homeowner, I am extremely disappointed that team at Zillow feels that without foreclosures included this is a "NORMAL" market. Based on this simple post, I am concluding that your algorithm is not designed to handle real-estate prices appropriately. In a normal market people making 80K a year cannot afford 500-600-700-1mil homes !!! Foreclosures/REO's are priced (marked-to-market) by the banks !!!!!! Even though bank prices are still high, they (the banks) feel they are pricing these houses appropriately, yet you feel this is not part of a normal market !!!

You cannot ignore market data !!! Foreclosures are part of the market !!!! Bad trades are not ignored on the stock exchange, yet you feel you have the right to remove valid data from your algorithms. Guess what, it is going to get worse, stop giving people hope !!!!!!!!

Disgusting !!!

Emil said...

"Foreclosures/REO's are priced (marked-to-market) by the banks !!!!!! Even though bank prices are still high, they (the banks) feel they are pricing these houses appropriately...:

Small distinction: Banks do not price the houses to what they should be worth (factoring out the housing bubble). They price them as high as they can, in a market of buyers willing to pay for that price level.

"You cannot ignore market data !!! Foreclosures are part of the market !!!! Bad trades are not ignored on the stock exchange, yet you feel you have the right to remove valid data from your algorithms."

On point! :)

ProblemWithCaring said...

Stop listening to David after:
"Realtors do the same thing when setting prices."

Annnnnd???

Why would a Realtor WANT to comp a foreclosure when their commission is based on HOW HIGH a piece of property sales.

I mean, is Zillow about market value pricing or isn't it? If you don't want to be a flash in the pan, stop using the outdated realtor model and ADAPT.

HP12C said...

Thanks David G for pointing out how Zillow is a trailing indicator at best and totally useless. In fact, it's more useless the more dynamically the market is changing in either direction by definition... BRAVO!

Well there is one use, for realtors looking for another piece of inaccurate data with which to fool 'clients' into paying more. Is the the goal of Zillow?

Your 'normal' market definition is bull$hit. Period. If Zillow were not fraudulent, it would show what it says it shows - what a house will sell for in the marketplace. How on earth can that not include foreclosures? Are market prices set by what realtors say they're worth or what people pay?

HP12C said...

Actually, I think it's important to point out that Zillow is more wrong the more a market is changing, but it's MORE wrong on the way down than it is on the way up - because it eliminates foreclosures but not very high (fraud?) sales. How realtor of you, Zillow. You're worse than everyone you're trying not to be because you imply you're not acting in the same manner to deceive and keep info from the marketplace.