Monday, March 14, 2011

Washington, DC Metro Area Home Values

Here's a graph of nominal single-family home values from Zillow showing that, despite what you may have heard elsewhere, home values in the Washington, DC metro area are indeed falling again.

15 comments:

  1. Perhaps the "Gay Oil Guru" will provide us with details regarding his soaring home value. (and they joys of car ownership in the District of Columbia)

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  2. You bet your ass they are falling! And until values hit the 2003 level, they won't stop falling. So enjoy the show!

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  3. And yet, Case Shiller (who measures same) house sales, shows that prices are indeed rising - currently more than 4% YOY in DC, and up 12% from the march 09 bottom.

    http://www.standardandpoors.com/home/en/us

    Oh, how sad for you!!!

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  4. Jonathan A ClarkMarch 15, 2011 10:34 AM

    Yeah, I would like to understand Zillow's home "values" versus recorded home sales prices. I think the former may be more valuable for a prospective buyer but it is subjective somehow--they have to be factoring in some other data. The latter, however, likely has a selection bias favoring more expensive places...

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  5. -sniff sniff-

    I smell someone who owes money on a condo in Arlington!

    Remy, is that you?


    Arlington: The Rap

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  6. -sniff sniff-

    Fee Fi Foe Fum, I smell the blood of a condo owner in Arlington!

    Remy, is that you?


    Arlington: The Rap

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  7. Huh. Why the discrepancy with Case-Shiller?

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  8. And median prices, and price PSF, and Core Logic, and Zillow's sale prices, all of which are going up?

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  9. I think the biggest difference between Case-Shiller and Zillow is how they treat foreclosures. Case-Shiller counts foreclosures and Zillow doesn't. It's a philosophical difference. I think Zillow is correct. A given house is legitimately worth a lower price if it is a foreclosure sale rather than a regular sale, because the buyer takes a greater risk in a foreclosure sale. Thus, a foreclosure crisis distorts CS, but not Zillow.

    Another big difference is that Case-Shiller only tracks homes that are selling (or being refinanced). Zillow tries to estimate the value of ALL homes. If people with falling home values keep their homes off the market, they won't get counted by CS, but they will get counted by Zillow. Again, at least conceptually, Zillow is the better model.

    The downside to Zillow is that occasionally they come out with some really wild estimates of a particular home's value. One would hope that the aggregate of these wild estimates average out to equal the market price, but we can't know for sure.

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  10. I think at least Zillow provides one value: the trend!

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  11. This from Zillow:

    "An important property of the Zillow Zestimate that allows us to aggregate them into a very accurate and reliable Zindex is that they have relatively little systematic error meaning that, while each Zestimate has some margin of error, they are just as likely to be above the actual sale price of a home as below. This means that individual estimates, each with some error, can be aggregated to form a quite accurate measure of all homes. What little systematic error does creep into the Zestimates is removed from all historical data series when we calculate the Zindex for the quarterly reports."

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  12. I've got a post coming on Friday that will show how true that is.

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  13. The 2011 spring housing market is very soft. Sales are markedly down from 2010. Shiller's prediction that home prices will fall another 15% - 20% this year is likely to come true.

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  14. What planet are you on? Clearly not in the vincinity of Wash., DC.

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