Where is this Real Estate Market Headed?

Where is this Real Estate Market Headed?  That is the hottest topic in Real Estate today!  

I just found a great article keepingcurrentmatters.com – that took several surveys to give us something to chew on.  The below image takes those surveys and shows us some different values. 

It is interesting to see the forecast for each model.  Just know Real Estate goes up and down, we’ve reached our 10 years mark since the crash – we’ve seen massive market healing but now – are we at the top?

Real Estate has and always will be a long term investment.  It goes up and down over the years.  Yes, in hot markets it feels like you can buy and flip in two weeks but that market is in the past now.  For most of 2019 and staring in Fall of 2018 – The Caton Team saw a change in the market.  Here on the San Francisco Peninsula – we are in a Buyers Market!  Now – let’s be real – well priced homes, in good areas are going to warranty more actively.  I hosted a well priced duplex this weekend and they have an offer date set after four days on the market.  It’s the first offer date I’ve seen in a while.  But that price and location – makes it a hot market.

However, as hot as new listings are – don’t forget to look at older inventory.  If a home is on the market over the Fall and Holidays it is because it has to sell – giving buyers a great opportunity. 

So where is the market going?  How about we ask you a different question? Where are you going?  Do you want to make Silicon Valley your home?  Do you work here, love what you do and want to earn some equity instead of wasting money on rent?  Do you think prices are so high – you can’t buy – have you considered house hacks or co-investing.  If you see the vaule if Real Estate no matter where we are in the Real Estate High Low cycle – then you know – now is a great time to buy.

With so much conflicting information out there, making the right decision can be daunting.  If you have some questions or just want to bounce around idea – give The Caton Team a call.  We’re not here to sell you a house – but we are here to help you invest in your future. 

Screen Shot 2019-09-23 at 12.50.33 PM

I read this article at: keepingcurrentmatters.com

Got Real Estate Questions?   The Caton Team is here to help.

We strive to be more than just Realtors – we are also your home resource. If you have any real estate questions, concerns, need a referral or some guidance – we are here for you. Contact us at your convenience – we are but a call, text or click away!

The Caton Team believes, in order to be successful in the San Fransisco | Peninsula | Bay Area | Silicon Valley Real Estate Market we have to think and act differently. We do this by positioning our clients in the strongest light, representing them with the utmost integrity, while strategically maneuvering through negotiations and contracts. Together we make dreams come true.  How can The Caton Team help you?

A mother and daughter-in-law team with over 35 years of combined, local Real Estate experience and knowledge – would’t you like The Caton Team to represent you? Let us know how we can be of service. Contact us any time.

Call | Text | Sabrina 650.799.4333 | Susan 650.796.0654

Email |   Info@TheCatonTeam.com

The Caton Team – Susan & Sabrina
A Family of Realtors
Effective. Efficient. Responsive.
What can we do for you?

The Caton Team Testimonials | The Caton Team Blog – The Real Estate Beat | TheCatonTeam.com | Facebook | Instagram | HomeSnap | Pintrest | LinkedIN Sabrina | LinkedIN Susan

Want Real Estate Info on the Go?  Download our FREE Real Estate App:  Mobile Real Estate by The Caton Team

Berkshire Hathaway HomeServices – Drysdale Properties

DRE # |Sabrina 01413526 | Susan 01238225 | Team 70000218 |Office 01499008

The Caton Team does not receive compensation for any posts.  Information is deemed reliable but not guaranteed. Third party information not verified.


 

 

Bay Area housing market cools, but it’s still nuts – SF Chronicle

By: Kathleen Pender 

The Bay Area real estate market went into 2018 with a bang and out with a whimper.

In the first half of the year, the median price rose almost 17 percent to an all-time high of $875,000 in June. In the second half, it fell 10.3 percent from that peak, ending at $785,000 in December.

The December price was down 3.7 percent from November but up 4.6 percent from December 2017, according to a report Thursday from research firm CoreLogic. It includes all new and existing homes and condos in the nine Bay Area counties.

An earlier report from the California Association of Realtors — which includes only existing, single-family homes entered into a multiple listing service — said the Bay Area median price fell to $850,000 in December, down 6.1 percent from November and down 3.6 percent from December 2017. That was the first year-over-year drop since March 2012.

Any way you look at it, the market downshifted in the last three months of 2018. As the stock market plunged and mortgage rates rose a half percent to almost 5 percent, buyers backed off, inventory grew, price cuts surged, and price appreciation slowed from the double to single digits on a year-over-year basis.

The number of homes sold in December fell to 5,341 across all nine counties, down 13.2 percent from November and 21.6 percent from December 2017. That was the lowest sales count for a December in 11 years, CoreLogic said.

Many sellers, perhaps unaccustomed to a less-than-ridiculous market, took their homes off the market or let their listings expire. A total of 2,493 listings in the nine Bay Area counties were withdrawn or expired in December, compared with only 1,154 in December 2017 and 1,487 in December 2016, according to analyst Patrick Carlisle of the Compass real estate firm.

“December was rock bottom,” said Chad Eng, a Redfin agent in Silicon Valley. “Buyers are hesitating, on the sidelines. Sellers are still focusing on comps from six months ago.”

Instead of selling in days like they were earlier in the year, homes took weeks or even months to sell. Homes that closed in December had been on the market 29 days before getting into contract. That was up from 23 median days on market in November and 17 in December a year ago, the Realtors association reported.

Eng said things picked up around the middle of January, as the stock market recovered and mortgage rates fell back into the 4.5 percent range. “I wonder if it’s a sign of what we will see in the spring,” or just a normal seasonal rebound, he said.

Santa Clara County was the hottest market in the Bay Area — and most of the country — for the first part of the year as prices rose in the teens and 20s year over year. In February, its median price topped $1 million for the first time, rising to $1,080,000, up 27.8 percent.

That was the month a two-bedroom, one-bathroom, 848-square-foot home on Plymouth Street in Sunnyvale sold for $2 million cash — making headlines as the height of Silicon Valley insanity.

That was and still is a record price-per-square-foot for Sunnyvale, said Doug Larson, a Coldwell Banker agent, who represented the seller. “Now with the softening market, I doubt that anybody will beat it, at least for a while,” he said.

After hitting $1.15 million in June, Santa Clara’s median price has fallen to $1 million in December, exactly where it was a year ago.

January is always a slow month for the real estate market, as sellers recover from the holidays and get their homes spruced up for the busy spring season.

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“Homes that sell in the winter are typically homes that have been sitting on the market awhile and have to take a price cut,” said Redfin Chief Economist Daryl Fairweather.

Right now, “buyers are in a holding pattern,” she added. “They don’t know if this is as good as it’s going to get, if prices come down or more homes come on the market.”

She noted that a slower market is good for buyers because “they have more negotiating power” and for sellers who are moving up to a more expensive home because “overall they are going to be saving more money.”

Fairweather predicts that prices will end the year about where they are now. “I would be surprised if they go down,” she said.

Nancie Allen, president of Bay East Association of Realtors, said the government shutdown in January made it hard to tell where the market is headed. The next two weeks will be a better indicator. The market now “is all over the place,” she said. Some homes in Fremont have been sitting on the market for a while, while one had 15 offers.

Aaron Terrazas, a senior economist with Zillow, said his data show that home prices in the last quarter of 2018 rose at their slowest annual pace for any quarter since 2010.

He predicts that prices will appreciate 5 to 6 percent this year in the San Francisco metro area and 7 to 8 percent in the San Jose metro area, assuming interest rates stay low.

Kathleen Pender is a San Francisco Chronicle columnist. Email: kpender@sfchronicle.com Twitter: @kathpender

I read this article at: SF Chronicle

Got Real Estate Questions?   The Caton Team is here to help.

We strive to be more than just Realtors – we are also your home resource. If you have any real estate questions, concerns, need a referral or some guidance – we are here for you. Contact us at your convenience – we are but a call, text or click away!

The Caton Team believes, in order to be successful in the San Fransisco | Peninsula | Bay Area | Silicon Valley Real Estate Market we have to think and act differently. We do this by positioning our clients in the strongest light, representing them with the utmost integrity, while strategically maneuvering through negotiations and contracts. Together we make dreams come true.

A mother and daughter-in-law team with over 35 years of combined, local Real Estate experience and knowledge – would’t you like The Caton Team to represent you? Let us know how we can be of service. Contact us any time.

Call | Text | Sabrina 650.799.4333 | Susan 650.796.0654

Email |   Info@TheCatonTeam.com

The Caton Team – Susan & Sabrina
A Family of Realtors
Effective. Efficient. Responsive.
What can we do for you?

The Caton Team Testimonials | The Caton Team Blog – The Real Estate Beat | TheCatonTeam.com | Facebook | Instagram | HomeSnap | Pintrest | LinkedIN Sabrina | LinkedIN Susan

Want Real Estate Info on the Go?  Download our FREE Real Estate App:  Mobile Real Estate by The Caton Team

Berkshire Hathaway HomeServices – Drysdale Properties

DRE # |Sabrina 01413526 | Susan 01238225 | Team 70000218 |Office 01499008

The Caton Team does not receive compensation for any posts.  Information is deemed reliable but not guaranteed. Third party information not verified.

Why Homebuyers Pass Up Good Homes

Selling your home takes hard work and commitment to get it ready to impress buyers.  While you cannot control the market, you can control your home’s appeal.  Don’t let the following reasons make buyers pass on purchasing your home!

  1. PRICE:  If you price your home too high, the right buyer won’t see it, and the ones who do see it will quickly realize other homes in the same ring offer more value.
  2. CLUTTER:  If your tables are full to the edge with photos, figurines, mail and coffee cups, buyers will be more focused on trying not to break something than considering your home for purchase.  To much stuff makes it confusing for buyers to see the rooms clearly, so they’ll move onto to a cleaner choice.  Not because the house is “dirty” – simply because you so clearly live there and the buyer can’t see past “your” house to “their” house.  When going to sell it is time to start packing up everything!  I sometimes find myself distracted by photos or art that even a pro – gets swept up!  It is important to present your home in a simply fashion so the buyer can mentally move in.
  3. DEFERRED MAINTENANCE:  Buyers really want home that’s been well-maintained, so it’s your job as the homeowner to keep your home in good condition.  You don’t want buyers wondering what needs fixing and how much that will cost BEFORE they write their offer.  Chances are if the list is too long they’ll find a better suited home for their needs and budget.
  4. OUTDATED DÉCOR:  The reason people are looking at your home instead of buying brand new is because of cost and location.  They want your neighborhood but not a dated-looking home.  Take popcorn ceilings and flocked wallpaper down BEFORE you go on the market.  Replace carpet with an upgrade or perhaps hardwood floors.  Even vinyl flooring makes better sense than saying “the new owner can change it”.  Chances are there will be no new owner if they can’t see past the old.
  5. SMELLS:  There’s not a buyer in the world who will buy a home that smells like pets, dirt or water damage.  If you get an offer at all, it will be low and contingent on a positive inspection.  Replace the carpets and drapes and soft materials around the home that retain smells.  Repaint.  Prepare the home to be showcased.

Whenever you place your home on the market, you truly need to look at the home through difference eyes.  Get it ready to sell – make it shine!

Got Questions – The Caton Team is here to help.  We are but a call or click away!

The Caton Team is comprised of Susan and Sabrina Caton – a mother/daughter in law team.  We are full time, local Realtors with over 25 years of combined Real Estate experience.  How can The Caton Team help you?

I read this article at: 

Remember to follow our Blog for the local real estate beat, a pulse on the San Francisco Peninsula at: https://therealestatebeat.wordpress.com

Got Questions? – The Caton Team is here to help.  

Email Sabrina & Susan at:  Info@TheCatonTeam.com

Call us at: 650-568-5522  Office: 650-365-9200

Want Real Estate Info on the Go?  Download our FREE Real Estate App:  http://thecatonteam.com/mobileapp

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YELP us at: http://www.yelp.com/biz/the-caton-team-realtors-sabrina-caton-and-susan-caton-redwood-city

Or YELP me:  http://www.yelp.com/user_details_thanx?userid=gpbsls-_RLpPiE9bv3Zygw

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Connect with us professionally at LinkedInhttps://www.linkedin.com/in/sabrinawendtcaton

https://www.linkedin.com/in/susancatonrealtor

Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

The Caton Team – Susan & Sabrina – A Family of Realtors

Effective. Efficient. Responsive.  What Can The Caton Team Do For You?

Berkshire Hathaway HomeServices – Drysdale Properties

Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE# 70000218/ Office BRE #01499008

The Caton Team does not receive compensation for any posts and the information is deemed reliable but not guaranteed.

Seller’s Advice – Negotiating…

When you list your home for sale, you believe you’ve priced it right, staged it beautifully, and timed the market correctly for a quick sale.  But that doesn’t mean buyers will pay full price.

First-time homebuyers deferred home-buying seven years longer than other generations and are challenged by high home prices, large down payment requirements as well as unprecedented college debt.  Due to the last recession, housing stock is older and few new homes are available.

So even though your housing market may be healthy with homes selling quickly, expect to negotiate.  Negotiating doesn’t mean you win and the buyers loses, or you lose and the buyer wins.  It’s a way for both of you to win.  The Caton Team always says – buying and selling a home is a meeting of the minds – not a force of hand.

Don’t take a low offer personally.  The buyer may be using the low price to tell you something, like your hime is tired or overpriced for the neighborhood.  Or perhaps it is ALL THEIR MONEY!  Your job is to find out what that something is.  Have your Realtor ask their reasoning for offering such a low price.  You’ll be surprised!

Meanwhile, ask your Realtor for an updated comparable market analysis.  Markets change quickly and learning new information may convince you to reconsider your position.  Be flexible on the points that count most with the buyer like closing costs.  Throw in the washer and dryer, and the buyer could be more flexible when it comes to repairs and other concerns.

You want to keep the dialogue open and a possible deal alive.  Remember, the buyer chose YOUR home, and it could be your best opportunity to sell.

 

GOT QUESTIONS?  The Cat Team is here to help.  We are a call or click away.

 

The Caton Team is comprised of Susan and Sabrina Caton – a mother/daughter in law team.  We are full time, local Realtors with over 25 years of combined Real Estate experience.  How can The Caton Team help you?

Remember to follow our Blog for the local real estate beat, a pulse on the San Francisco Peninsula at: https://therealestatebeat.wordpress.com

Got Questions? – The Caton Team is here to help.  

Email Sabrina & Susan at:  Info@TheCatonTeam.com

Call us at: 650-568-5522  Office: 650-365-9200

Want Real Estate Info on the Go?  Download our FREE Real Estate App:  http://thecatonteam.com/mobileapp

HomeSnaphttp://www.homesnap.com/Sabrina-Caton

Visit our Website at:   http://thecatonteam.com/

Visit our INSTAGRAM page:  http://instagram.com/thecatonteam

PINTREST: https://www.pinterest.com/thecatonteam/

Visit us on FACEBOOK:   http://www.facebook.com/pages/Sabrina-Susan-The-Caton-Team-Realtors/294970377834

YELP us at: http://www.yelp.com/biz/the-caton-team-realtors-sabrina-caton-and-susan-caton-redwood-city

Or YELP me:  http://www.yelp.com/user_details_thanx?userid=gpbsls-_RLpPiE9bv3Zygw

Twitterhttps://twitter.com/TheCatonTeam

Connect with us professionally at LinkedInhttps://www.linkedin.com/in/sabrinawendtcaton

https://www.linkedin.com/in/susancatonrealtor

Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

The Caton Team – Susan & Sabrina – A Family of Realtors

Effective. Efficient. Responsive.  What Can The Caton Team Do For You?

Berkshire Hathaway HomeServices – Drysdale Properties

Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE# 70000218/ Office BRE #01499008

The Caton Team does not receive compensation for any posts and the information is deemed reliable but not guaranteed.

Fall Real Estate Market – For Sellers….

For those of you who follow my blog – you may have read my entry about buying in the Fall. It truly is a great opportunity in the market. So today, let me focus on the sellers because it is still a great time in Silicon Valley Real Estate.

Often sellers feel, in order to get the most bang for their buck, they need to wait and sell in the Spring. Yes, that can be true. Historically that is when the most buyers are out in force and their football spouses are off the sofa!  However, I don’t know about you – but life happens everyday all year round – so often, a seller cannot wait till March to get their home on the market. And I’m here to say – that is ok!

Truthfully every day homes come on and off the market. Life has its moments – job transfers, babies, weddings and funerals. There are always buyers in the mix – it’s just that most of them are on board in the Spring. It can be a frenzy and in that frenzy some homes can get overlooked. Making the Fall a great opportunity to stand out.

Today, we are in a very interesting Fall Real Estate market. We truly have the lowest interest rates in history. 3% at the moment! Now, for several years I know we’ve been saying these are the lowest rates in history – because they have continuously gone down. However, it is forecasted to change. Many people feel our market is fueled by these lowest of low rates and that once rates go up – purchase power will go down. Well that is truly the brass tacks of it – they are right. That is how the math works. Yet there is one thing that keeps our Silicon Valley Real Estate market strong – demand. We have the most demand in the country and that keeps our values up.

So what does this mean for sellers? If you wait to sell your home next year in the Spring – and interest rates go up – you could loose a chunk of your potential buying pool. And how home prices keep soaring up – is demand and multiple offers on homes. Without multiple offers the catbird seat is handed over from the seller to the buyer. Really it comes down to this – you will sell your home for the best price the current market will hold. So no matter what happens – keep that in mind. And right now – market values are still up and with demand to boot.

Usually I do not see many homes come on the market in the Fall. However in recent weeks, that opposite is true. I am actually seeing homes listed every day – along with many price reductions for homes that may have been lost in the shuffle over the Summer. (Happy to chat about how that happens if you are interested – reach out.)

So, if you are considering a move – chew on this – each client has unique Real Estate needs. I cannot, nor my Realtor constituents, foretell the future. What we can do is plan on the market today. With so many eager buyers still in the market, holding their awesome pre-approval letters and dying to lock at 3% interest rate – they are ready, willing and able to buy NOW. Which makes this a unique and wonderful time to sell!

Do you have questions or concerns – please contact The Caton Team, we’re happy to sit down with you, listen your needs and goal and devise a plan of action. Maybe we sell today, maybe tomorrow – either way The Caton Team is dedicated to your financial needs and goals. Let’s end this year on a positive note. How can The Caton Team help you?

Remember to follow our Blog for the local real estate beat, a pulse on the San Francisco Peninsula at: https://therealestatebeat.wordpress.com

Got Questions? – The Caton Team is here to help.  

Email Sabrina & Susan at: Info@TheCatonTeam.com

Call us at: 650-568-5522 Office: 650-365-9200

Want Real Estate Info on the Go? Download our FREE Real Estate App:  http://thecatonteam.com/mobileapp

Visit our Website at:   http://thecatonteam.com/

VISIT OUR INSTAGRAM PAGE: http://instagram.com/thecatonteam

Pintrest: https://www.pinterest.com/thecatonteam/

Visit us on Facebook:   http://www.facebook.com/pages/Sabrina-Susan-The-Caton-Team-Realtors/294970377834

Yelp us at: http://www.yelp.com/biz/the-caton-team-realtors-sabrina-caton-and-susan-caton-redwood-city

Or Yelp me: http://www.yelp.com/user_details_thanx?userid=gpbsls-_RLpPiE9bv3Zygw

Connect with us professionally at LinkedIn: https://www.linkedin.com/in/sabrinawendtcaton

https://www.linkedin.com/in/susancatonrealtor

Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

The Caton Team – Susan & Sabrina – A Family of Realtors

Effective. Efficient. Responsive.  What Can The Caton Team Do For You?

 

Berkshire Hathaway HomeServices – Drysdale Properties

Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE# 70000218/ Office BRE #01499008

 

Zillow CEO Spencer Rascoff sold home for much LESS than his own Zestimate!!!!!

You know we Realtors out there are thrilled with this news story. After so many difficult conversations explaining why a zestimate is not accurate – for the CEO to sell his home below his own zestimate – well it does leave us smiling ear to ear. There is a reason why online, automated home values do not work. In theory – they are a great tool and should work. But in actuality – they are often very inaccurate and set the bar for disappointment. If you are curious about the worth of your home, contact your Realtor – or The Caton Team. We’d be happy to prepare a custom, accurate and local snapshot of what your home is worth in today’s dynamic Real Estate market. Thank you for reading – Sabrina 650.586.5522 info@TheCatonTeam.com

 

Zillow CEO Spencer Rascoff sold home for much less than Zestimate

Clients putting Zestimates on a pedestal? Point them toward this sale

Key Takeaways

  • Agents can demonstrate the Zestimate’s shortcomings by showing the discrepancy between the sales price of a home formerly owned by Zilow CEO Spencer Rascoff and its Zestimates.
  • Luxury home Zestimates are more likely to be off than others due to ‘non-quantifiable facts.’
  • Irregular lot sizes or proximity to ‘arterial’ roads can sometimes throw off Zestimates.

 

Zillow CEO Spencer Rascoff may have recently given real estate agents a gift they won’t soon forget: a sure-fire way to show that Zestimates can miss by a mile.

How? By selling a property for much less than its Zestimate.

On February 29, Rascoff sold a Seattle home for $1.05 million, 40 percent less than the Zestimate of $1.75 million shown on its property page a day later.

The gap between the Zestimate of Rascoff’s former property and its sales price has decreased only modestly since then.

Zillow readily acknowledges that Zestimates can be inaccurate, but some consumers can still take them at face value, causing headaches for agents.

Citing the chasm between the sales price of Rascoff’s former home and the property’s Zestimate may be one way for real estate professionals to show clients that Zestimates are, as Zillow says, only a conversation starter for pricing a home, not the final word on its value.

 

Zillow CEO sold his home for way less than Zestimate.

 

Philip Gray, a San Leandro, California-based appraiser, is taking this approach. Bringing up the Zestimate of the property Rascoff recently offloaded will help him deal with the frequent pushback he receives from homeowners “who think Zillow is the magic 8-ball,” he said.

‘We missed’ 

Zestimates on Rascoff’s former home have certainly been overstating the property’s value, said Zillow Chief Analytics Officer Stan Humphries.

“The fact that we missed and there are empirical reasons we missed — that’s a great conversation that real estate agents should have” with consumers, he said, citing the property’s irregular lot and location on a busy road as partly responsible for its Zestimate’s inaccuracy.

But he expressed hope that, in the same discussion, agents also won’t instill “data nihilism” in consumers, and that they acknowledge that humans also can miss the mark.

Smaller gap at start

In July, the Zestimate of Rascoff’s former property wouldn’t have raised the eyebrows of anyone who’s familiar with automated valuation models (AVMs). At $1.388 million, the property’s Zestimate was 7.3 percent higher than its listing price of $1.295 million at the time.

Since Zillow only shows revised historical Zestimate data on property pages, the home’s property page currently indicates that the property’s Zestimate was around $1.6 million in July 2015, somewhere in the neighborhood of $200,000 more than the Zestimate that actually appeared on its property page on July 17, 2015. For all anyone knew in July 2015, the property might have eventually sold at a price closer to its Zestimate than its listing price.

But that didn’t happen. The home later sold for $1.05 million, 19 percent below its July listing price. Undergoing a number of price cuts, the property was listed and de-listed several times between when it was originally listed on July 7, 2015 and when it sold on February 29, 2016.

If Rascoff thought his home was worth its July listing price, the outcome of the sale might have come as a disappointment. But if the success of the transaction were judged by the property’s Zestimate, it was a failure.

The home’s Zestimate was $1,750,405 on March 1, the day after the property sold for $1,050,000.

If that Zestimate were accurate, it would mean the chief of the biggest name in real estate and the recent co-author of a book about “the new rules of real estate” would have sold his home for 40 percent less than it was worth.

Automated valuations vary

In addition to highlighting the shortcomings of Zestimates, the Zestimate of Rascoff’s home also brings into focus the potential for some automated valuations to be more accurate than others.

Unlike Zillow’s property page on the home the day after it sold, Redfin’s page on the home showed that the sale had occurred. At the time, it displayed a valuation of $1.1 million — much closer to the property’s sales price of $1.05 million.

 

On Thursday, May 5, Redfin’s estimate of the home’s value was $1.3 million.

So while Zillow’s estimate had come down by around $140,000 since the home sold, Redfin’s had increased by about $200,000. Both differed from the price the home sold for a little over two months ago by hundreds of thousands of dollars.

Zillow has since added the sales price of Rascoff’s former home to its property page.

The property’s Zestimate had slipped from $1,750,405 the day after it sold to $1,608,670 on May 5, but its Zestimate on May 5 still only represented 65 percent of what the home sold for a little over two months before.

To judge the Zestimate’s accuracy based solely on the gap between the sales price of Rascoff’s former home and its Zestimate would probably be unfair. The discrepancy is unusually wide, according to what Zillow says is the Zestimate’s median error rate.

Zillow puts the Zestimate’s national median error rate at 7.9 percent, meaning half of Zestimates nationwide are within 7.9 percent of a home’s sales price and half are off by more than 7.9 percent. The listing portal claims an even higher level of accuracy in Seattle, where Rascoff’s former home is located.

There, Zestimates for half of homes are supposed to be within 6.1 percent of their sales price, while half are supposed to be off by more than 6.1 percent. This suggests that the Zestimate of Rascoff’s home missed by much more than normal in Seattle.

Why was that?

One reason is that the home’s Zestimate was comparing Rascoff’s former home, which is located on a triangular lot, to recently sold homes located on rectangular lots, according to Humphries.

Since rectangular lots provide more utility than triangular lots, he said, that meant the Zestimate was overvaluing the plot of Rascoff’s home.

Another reason was that Rascoff’s home was located on an “arterial” road while nearby recently sold homes sat on quieter streets.

Zillow continues to research how to program Zestimates to account for such factors, but “we haven’t fully cracked the nut on that one” yet, Humphries said.

‘The classic luxury homes problem’

Zillow Senior Economist Skylar Olsen added that the Zestimate of Rascoff’s home represents “the classic luxury homes problem.”

Zestimates can’t take into account “non-quantifiable facts,” such as layout design or lighting, and these facts can have much more of an effect on the values of luxury homes than less expensive properties, she said.

Real estate agents can see how special features impact a property’s value, but the “Zestimate algorithm can’t know” and “at this point in time, it’s not designed to know,” she said.

The reason why the Zestimate of Rascoff’s former property hasn’t dropped dramatically since selling at a much lower price than Zestimates leading up to the sale is that the Zestimates have a “smoothing function” designed to keep them from overreacting to recent property sales.

The Zestimate on the Rascoff’s former property will gradually come down to more closely resemble its sales price. And upcoming updates to the Zestimate’s algorithms will adjust the smoothing function so that the Zestimate of a home that sells will come to more closely mirror its sales price much faster.

Also worth noting is that Zillow does not have access to sold listing data from the Northwest Multiple Listing Service, the MLS that covers Seattle. Automated valuation models (AVMs) that crunch sold MLS data can have an advantage over AVMs that only use public sales records — which are the only sales records used by Zestimates covering Seattle.

While Zillow says on its website that most consumers understand that Zestimates truly are only estimates, the listing portal concedes that, sometimes, “someone will come along that insists on setting the price they are willing to buy or sell for based solely on the Zestimate.”

Zillow goes on to say that “education is the key” and that, armed with knowledge of how Zestimates are calculated along with their local median error rate, agents can explain “why the Zestimate is a good starting point as well as a historical reference, but it should not be used for pricing a home.”

While Zestimates can create hassles for agents, some agents would certainly agree with Zillow’s assertion that understanding how a Zestimate is calculated, along with its strengths and weaknesses, “can provide the real estate pro with an opportunity to demonstrate their expertise.”

The gap between the Zestimate of Rascoff’s former property and its sales price may have made it easier for agents to seize that opportunity.

Zillow’s Humphries’ hopes that, when putting Zestimates in perspective for consumers, agents will also acknowledge that Zestimates do have a scientific basis, and that nobody’s perfect — even trained professionals.

He noted that a study released by Zillow in 2012 showed that the typical gap between a home’s Zestimate and its sales price wasn’t that much larger than the typical gap between a home’s initial list price — which is often set based on a real estate agent’s recommendation — and its sales price.

“We acknowledge humans are great at this, and we’re great too — but they’re greater,” Humphries said.

 

I read this article at: https://www.inman.com/2016/05/18/zillow-ceo-spencer-rascoff-sold-home-for-much-less-than-zestimate/?utm_source=20160521&utm_medium=email&utm_campaign=weeklyheadlines

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3 Ways to Make Your Home Worth More

3 Ways to Make Your Home Worth More

 

I truly enjoy sharing articles I find interesting – this one is in time for the Spring Real Estate Market. Enjoy – Sabrina

 

In its 10 years of existence, online real estate database Zillow (Z) has collected an unfathomable amount of information on housing prices. In the new book “Zillow Talk: The New Rules of Real Estate,” CEO Spencer Rascoff and chief economist Stan Humphries put that data to use by sharing ways to get the most value out of a home. “We’re interested in converting real estate from an area of folklore into fact,” Humphries told Yahoo Finance. He joined Jeff Macke to share some of his favorite tips for navigating today’s real estate market.

Redo the bathroom, not the kitchen

“It’s always been conventional wisdom that the best remodel you could do was the kitchen,” says Humphries. “We actually crunched an enormous amount of data…what we found is actually it’s the bathroom remodel that adds the most value to a house.”

According to Humphries it makes the most logical sense because with a bathroom remodel functionality is being added to the house whereas kitchen upgrades are often more about fashion.

According to Zillow’s data a mid-range $3,000 bathroom remodel results in a $1.71 increase in home value for every $1.00 spend on renovation.

Plus “when people come to stay with you, you’re going to be a lot happier that you have a nicer bathroom than kitchen.” Kitchen renovations offer among the lowest returns on investment. Both mid range and upscale work on the kitchen recover only about half of their investment.

Just don’t invest too much money in the bathroom, upscale $12,000 bathroom upgrades result only in an $0.87 increase in home value for every $1.00 spent.

Selling season

Home sales reach their peak in June, during the last week of that month residential real estate transactions are 40% higher than average. But when is the right time to list your home?

The home season starts to crank up in January and February, says Humphries. But to get the most bang for your buck you might want to list your house during the last two weeks of March. There’s a sharp spike in visitors making contact with real estate agents on Zillow beginning in mid-April and continuing into July.

Selling in the last weeks of March, before the peak in agent contacts and after the peak of newly listed homes in February puts your home in the sweet-spot where it’s likely to be seen quickly and not get lost within a flood of new listings.

Humphries writes to “put your home on the market after you fill out your NCAA March Madness basketball brackets, but before someone slips on an ivy-green jacket at the Masters Golf Tournament.”

Psychologically price your home

Ending your home price in a ‘9’ is incredibly beneficial, says Humphries. “If you were going to sell your house for $150,000, just pricing it down by $1000 and selling it for $149,000 ends up in you making $2175 more than you would if you priced it at $150,000.” The ‘9’ dynamic works for houses at all price-points.

In the majority of cases, home prices that end in a ‘9’ sell for more for a home of the same relative value that ends in a ‘0.’ The risk that the seller takes on by cutting their home price by $1,000 usually results in gaining more than $1,000 over asking.

psychological pricing also sold home faster– Zillow found that homes using ‘9’ in the thousands digit sold four days to one-week faster than those that didn’t.

 

I read this article at:

http://finance.yahoo.com/news/3-tips-for-saving-money-on-your-home-125820548.html

 

Remember to follow our Blog at: https://therealestatebeat.wordpress.com/

Got Questions? – The Caton Team is here to help.  

Email Sabrina & Susan at: Info@TheCatonTeam.com

Call us at: 650-568-5522

Want Real Estate Info on the Go? Download our FREE Real Estate App:  http://thecatonteam.com/mobileapp

Visit our Website at:   http://thecatonteam.com/

VISIT OUR NEW INSTAGRAM PAGE: http://instagram.com/thecatonteam

Visit us on Facebook:   http://www.facebook.com/pages/Sabrina-Susan-The-Caton-Team-Realtors/294970377834

Yelp us at: http://www.yelp.com/biz/the-caton-team-realtors-sabrina-caton-and-susan-caton-redwood-city

Or Yelp me: http://www.yelp.com/user_details_thanx?userid=gpbsls-_RLpPiE9bv3Zygw

Connect with us professionally at LinkedIn: http://www.linkedin.com/profile/view?id=6588013&trk=tab_pro

Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

The Caton Team – Susan & Sabrina – A Family of Realtors

Berkshire Hathaway HomeServices – Drysdale Properties

Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE# 70000218/ Office BRE #01499008