Statistical Tables | Mortgage Rates Outlook | 10 Essential Questions To Ask When Buying A Home
Suburban Chicago home builders filed legal action last week against the real estate marketing company Zillow, whose at-your-fingertips property-value approximations are misleading home buyers with lowball figures that roil sellers, the suit claims.
The so-called Zestimates that the Seattle-based Zillow app has calculated since 2006 pose as accurate appraisals in violation of the legal description in Illinois of an appraisal, which needs to be conducted by a licensed appraiser, according to the class-action complaint.
Zillow, for its part, maintains that its approximations are not actual appraisals, nor do they claim to be.
“We believe the claims in this case are without merit. We always say that the Zestimate is a starting point to determine a home’s value, and isn’t an official appraisal. It’s a computer-automated estimate of your home’s value,” Emily Heffter, a Zillow spokeswoman, told MarketWatch.
Zillow says its value estimates are based on public records and other data using “a proprietary formula.” Public records such as those posted on property-tax assessment sites can also be far off prevailing sales prices. Zillow also provides a disclaimer about the accuracy of its approximations.
In Chicago, a Zestimate comes within 5.9% of the eventual sale price just over 44% of the time. Nationwide, Zillow Zestimates are within 5% of the actual sale price 53.9% of the time, within 10% of the sale price 75.6% of the time and within 20% of the closing price 89.7% of the time, according to the company.
Wow, that’s not even good enough for government work!
As we wrote in this space last August, there is no way a computer program can give an accurate price for homes.
The problem begins with the fact that each home is different. Homes aren’t like stock shares. Each share of Apple stock, for instance, is exactly the same as every other share of Apple stock.
Homes, on the other hand, are each completely different, regardless of whether they were built by the same builder and have the same plan.
The major problem with all automated home estimate sites is they are limited to the data on hand. Typically, that includes only square footage, number of beds and baths, recent sales prices and assessor tax values.
Not included are location nuances: is the property on a quiet street or next to a main thoroughfare. Not included are upgrades: did the owners remove that cheap carpeting and replace it with hardwood floors? Were the appliances replaced with high-end hardware? Granite countertops or tile? Dual-pane windows to replace single-pane windows. The list goes on.
There are three ways to get an accurate estimate of your home’s worth.
Hire an appraiser. That costs money and they will be conservative.
Have a local REALTOR® come by to look at your property. A local REALTOR® will be familiar with your community, what’s sold, the condition of the property, what’s for sale and how desirable the property is in today’s market.
The third way is to do it yourself. You’ve probably lived in the neighborhood for years and visited with your neighbors so you know what has been done to their homes. Plus, with our Recent Sales & Listings module, available on our on-line Market Trends Report, you can keep track of the activity going on in your neighborhood.
Remember, in the final analysis, your home is worth what you and a ready, willing and able buyer decide it’s worth.
If you are thinking of selling your home and would like a proper estimate of what it will sell for in today’s market, call me, please.
|Trends at a Glance|
|May 17||Apr 17||May 16|
|Days on Market:||24||26||28|
|May 17||Apr 17||May 16|
|Days on Market:||30||33||33|
for single-family homes rose 3.5 points to +0.3. Pricing momentum for condos/lofts rose 1.7 points to -1.0.
Our momentum statistics are based on 12-month moving averages to eliminate monthly and seasonal variations.
This is an extraordinarily tough market for buyers. It's important to be calm and realistic. If you don't know what to do or where to begin, give me a call and let's discuss your situation and your options.
The graph below shows the median and average prices plus unit sales for homes.
The following chart shows the median price difference compared to the year before.
The graph below shows the median and average prices plus unit sales for condos/lofts.
The following chart shows the median price compared to the average price. The average price will always be more than the median price. The greater the difference, the more higher priced homes are being sold.
The real estate market is very hard to generalize. It is a market made up of many micro markets, especially in San Francisco. For complete information on a particular neighborhood or property, or for an evaluation of your home's worth, call me.
If I can help you devise a strategy, call or click the buying or selling link in the menu to the left.
Complete monthly sales statistics for San Francisco are below. Monthly graphs are available for each district in the city by clicking the links to the left.
|May Sales Statistics|
|Prices||Unit||Yearly Change||Monthly Change|
|D2: Central West||$1,519,838||$1,512,909||42||14||123.8%||26.7%||18.3%||-4.5%||12.6%||5.3%||20.0%|
|D4: Twin Peaks||$1,425,000||$1,630,545||25||26||115.3%||-1.7%||8.4%||-13.8%||-12.7%||-11.3%||-3.8%|
|D6: Central North||$-||$-||0||0||0.0%||n/a||n/a||n/a||n/a||n/a||n/a|
|D9: Central East||$1,587,500||$1,681,118||24||20||113.0%||-5.2%||-0.4%||41.2%||9.3%||15.4%||-7.7%|
|May Sales Statistics|
|Prices||Unit||Yearly Change||Monthly Change|
|D2: Central West||$1,217,500||$1,253,750||4||12||115.6%||26.9%||24.5%||0.0%||n/a||n/a||n/a|
|D4: Twin Peaks||$739,500||$682,606||4||52||108.4%||12.4%||2.1%||33.3%||2.0%||-13.5%||-20.0%|
|D6: Central North||$1,150,000||$1,342,186||21||25||108.3%||-3.4%||19.5%||23.5%||-3.8%||16.2%||-16.0%|
|D9: Central East||$1,156,544||$1,272,474||52||41||101.0%||-2.8%||-8.1%||-38.8%||11.7%||9.8%||-37.3%|
Jun. 2, 2017 -- Even with a Monday holiday, there was lots of fresh data out this week for markets to consider, but most of it seemed to tend toward the softer side of things. As expected, mortgage rates were mostly level this week, but current indications are that we might see a bit of a decline next week, should markets hold where they are at the moment.
Spending on new construction projects dropped off in April. The overall decline of 1.4 percent in outlays contained no bright spots this time around, as outlays for residential projects fell 0.7 percent, commercial construction dipped by 0.6 percent, and spending on public-works projects slumped by 3.7 percent. The residential figure is surprising, but already suspected from the easing in the housing starts report; commercial interests are probably growing a little wary given the troubles that retailers are having, but there should be plenty of public works projects that need attention. Spending on roads and schools and the like using taxpayer dollars have now declined in four of the last six months.
A spate of mostly modest to moderate date (to borrow a phrase from the Beige Book) and a lack of emergent price pressures would be sufficient to trim interest rates a little bit even if we didn't continue to have a difficult political climate.
Expectations for significant tax and regulatory relief haven't completely bled out of the market, but those hopes have faded considerably on recent months, tempering the outlook and expectation that the economy will soon be growing faster. Collectively, the environment is sufficient to keep rates both low and stable, and we'll need to see some warmer news to move rates up. That may come, but probably not next week; based upon where we finished this one, we are likely looking at another 3-4 basis point decline in the average conforming 30-year fixed rate mortgage as reported by Freddie come next Thursday morning.
By: Lisa Johnson Mandell
You’ve finally found it: a home you’re swooning over and dying to own. From the exposed ceiling beams to the hardwood floors, this feels like the place. So what’s next? Don’t just stand there dumbstruck; it’s time to dig deeper and ask questions—and not just the kind that randomly pop into your head, either. You need to hit all of the necessary topics head-on, and some of them are not so obvious.
But you’re in luck: We’ve pulled together a checklist of some of the most important initial questions to ask when buying a home:
What is the home’s sales history?
When was the last time the house sold, and how much did the current owners pay for it? This is essential intel, and you don’t even have to ask the seller or your real estate agent about it, because it’s posted on every MLS listing. All you have to do is scroll down to find it. But make sure you know it.
When buying a home, the previous sale price will give you a sense of what the sellers might expect you to pay—but keep in mind that a home’s true market value is based more on what comparable homes are selling for now rather than what it went for in the past, says Los Angeles Realtor® Jennifer Niman of Berkshire Hathaway HomeServices. Sales history will also show you whether the home’s price has been trending up or down over time, which can help you hone your negotiating stance.
Did the sellers make any major renovations or additions?
If they’ve overhauled the kitchen, added a bedroom, or finished the basement, you’ll want to know that—and, ideally, see receipts from contractors to get a sense of what they paid for these upgrades.
In general, this will give you a ballpark notion of how much money they’ve sunk into the home—and what they hope to get out. That said, don’t assume you have to fork over as much cash as they put in; home improvements generally reap only a 64% return on average. And that return on investment varies widely based on which renovation is done.
How much are the property taxes?
Property tax history is also typically available right on the listing detail page. If you can’t find it, ask the seller. You’ll want to find out what previous owners paid, but understand that the property tax, since it’s based on a percentage of the value of the house, will probably be affected by your purchase price. This could be a huge additional expense, and you’ll need to budget for that when putting together your offer.
What are the monthly maintenance and utility costs?
Is there any type of homeowners association fee? Find out. Also learn what kind of power the house uses, be it gas, oil, electric, or a combination, and ask what the average monthly bill for each is. Also inquire about water, waste removal, and any other utility costs that are applicable.
Has there ever been a broken pipe? Sewer backup?
This may sound trivial (not to mention unpleasant), but according to the Insurance Information Institute, broken pipes account for an estimated 22% of all home insurance losses. If the homeowner doesn’t ‘fess up, a good home inspector can probably find evidence of either one of these situations, so you might want to put these on your list of questions to ask your inspector, too.
How old is the roof?
The 2015 Remodeling Impact Report from the NATIONAL ASSOCIATION OF REALTORS® says the national median cost of an asphalt roofing replacement is about $7,600. It would be good to know how soon you might need to lay out that substantial amount of cash.
Have there ever been any pest infestations?
If there was an infestation, when were pest control procedures undertaken? No, this won’t necessarily mean the house is pest-free at the time you’re buying it, but it’s a good starting point to know the history. Many buyers require that termite treatment be included in the price; it’s easiest to tent for pest removal when the house is empty, between owners.
Are there warranties on the appliances, HVAC system, garage door, etc.?
And if so, can the homeowner provide the documentation? Ask for it. This can establish how old these features are, and give you an idea of when they might need to be replaced and how expensive it could be. It will also help you decide whether or not to buy a home warranty.
What are the parking restrictions around the house?
Will guests need parking permits? How many permits are you, as the homeowner, allowed, and can you obtain more if you decide to throw a party? Also, check out the parking situation on the property itself. Will your car(s) fit in the garage? Is there room to park anywhere else on the property other than the driveway?
Does the house have any kind of unusual history?
In many states, owners are legally bound to disclose if a death or major crime has occurred recently on the premises, but there are other circumstances you should be aware of as well. For example: Did anyone famous ever live there? Was it ever used in a film, TV series, or commercial? If so, you might have to deal with fans ringing your doorbell or driving by at all hours of the day or night.
Oh, and if the house has a history of being haunted or paranormally “stigmatized,” you might have a little extra negotiating power when buying a home. Thanks, ghosts.
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