the Property Monger Real Estate Blog

So this is definitely one of the main reasons I wanted to start a blog, so I could post some stats and easily revisit those same stats at later points. Well now is a great time for it. In the past week or so, I have noticed a vast increase in the amount of articles/blogs/stuff FREAKING OUT about the housing market. The first one I read was one of Nouriel Roubini’s blog posts the biggest slump in US housing in th last 40 years.

Man he paints an ugly picture. So you would think that if we were to look at sales prices within a certain area, group together as many as possible, take some averages, and put it on a graph, we would see the graph dropping like a fly… right?

As a self respecting Real Estate Agent, I never thought I would say this but… lets take a look at Zillow. Before we do though I’d like to make my opinion on the matter clear. Zillow is a very clever website. As an AVM (automated valuation model) for a particular home, I think it’s still lacking. That is to say, at this point, there are too many factors that the website can’t take into account to accurately value a specific home. But I don’t want to get too far on that point, if you really want to read about how Zillow sucks, read Greg Swans Bloodhoundblog (one of my personal favorites) stick it to Z man .

One thing I do like about zillow is the graphs and data it presents for zip codes, towns, and states. I believe the individual valuations are off, however when you group all of the data together and look at averages, I believe it in effect takes the inaccurate outliers out of the equation, and gives you a somewhat fair representation.

So I’ll admit it, I took a look at zillow. I took a look at a specific 2 bedroom in Brookline, MA And I get “1 week change: up $1,266Last updated: 09/01/2006″ what the hell???? Well that can’t be right. Lets look at some other numbers zillow gives us…

Past:     This home 02446 BROOKLINE Norfolk  MA     US
30 days 1.5%        0.6%      -0.2%        2.2% 1.1% 1.2%

Funny… it doesn’t LOOK like the market is in freefall… it looks like prices are actually slightly increasing, just not at the 15% per year people around here are used to. Well maybe there is still a zillow innacuracy and it’s lagging a few months behind the actual market. 

There’s actually some truth to the lag across Real Estate, not just for zillow.  In order to know market prices you have to see what something has sold for, and there is an inherent time difference between the exact time people agree on a price, and the time that the property closes and the sales price is publicly revealed.  The cause of the difference is because most people finance their acquisition, and banks like to do their research before they lend money.

The funniest part is that if you look at my numbers for Brookline 2 bed condos now versus 3 months ago , they sing a different story all together.  And I will reiterate, those numbers are skewed because they are averages, and some of these big projects will skew the numbers, but the fact of the matter is that SOMEONE is buying them. 

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