Buy a home in Las Vegas?

Quote: pacomartin

In general, how do homeowner's feel about Zestimates.

Speaking only for this homeowner, they're terrible. Overnight my house suddenly fell in value by 25%, I suppose because they suddenly lumped my home into a larger region with cheaper homes. If you go by the recent selling price per square foot in my neighborhood I can show they are about 30% too low.

Ask any real estate agent about it and you're likely to set them off on a rant about how bad they are.

Zillow is very regional in its accuracy. Some
places they're spot on, others places they're
way off. The more volitile the area, like Vegas,
the less dependable they are.

Quote: Wizard

Speaking only for this homeowner, they're terrible. Overnight my house suddenly fell in value by 25%, I suppose because they suddenly lumped my home into a larger region with cheaper homes.

I've noticed that homes.com and zillow.com have widely varying estimates as to value. And one is not consistently higher than the other one. For one house homes.com will be 25% higher, and for another zillow.com will be 10% to 25% higher. They should be forced to reveal their formula. At least it would be easier to challenge their estimating methodology.

You have to wonder about changing 25% in one month. No real estate market changes that fast without a hurricane or a typhoon.

What Zillow is good for is flagging homes for sale near the target property. I think they are typically flagged with a little red house symbol. Obviously every house is different, but it is helpful.

You can also pull up houses up and down the street on Zillow and find out when the house last sold and for what price. If you can find a recent one (I thought they used to flag recent sales with yellow houses, but not seeing that today), that can give you a good indication of value as well.

Again, not all houses are the same......if you are really serious, get with a professional real estate agent, they have databases with recent sales data that are much easier to use.

Quote: pacomartin

In general, how do homeowner's feel about Zestimates.

Zillow is fine for shopping, but a lender will use one of the serious professional services. When I processed mortgages even then you got a "confidence level" and if it was too low you had do do a drive by (FHA 1003 IIRC.)

Quote: AZDuffman

Zillow is fine for shopping, but a lender will use one of the serious professional services. When I processed mortgages even then you got a "confidence level" and if it was too low you had do do a drive by (FHA 1003 IIRC.)

But the problem is that you want to reach the casual shopper to get them to look at the property. The serious appraisal that a lender wants comes much later in the game. Bit of Zillow devalues your home 20% in one month, and devalues the house next door by 1% the same month, it's like being slandered. When you are slandered publicly, you might be able to convince a few people who take the time to listen that the charges are unfounded, but sometimes you care about the general impression. A lot of people won't go to an open house of a property that is not priced within 10% of the Zillow estimate.

I don't think doing these kind of estimates should be illegal, but I do think that they should be required to share their formula. At least you could refute them knowledgeably. There is no market where real estate drops 20%-25% in one month unless there is a natural disaster or some horrific news story. And it would effect all the homes in a neighborhood, not just one.

Bloomberg News says its far from over, the housing
debacle. Foreclosures have been down because
the Obama administration mostly stopped them
with investigations and fines, and now thats all
done and forclosures will start in ernest again.

There are people who haven't made a payment in
well over a year and Bloomberg feels home values
could easily drop another 20% in major cities
where unemployment is the highest, like Vegas.

Gary Shilling, Bloomberg:

"Because of excess inventories we estimate that there are two million inventories, both visible and shadow inventories, over and above normal working levels, and that's a lot. Back in the, oh, normal times, we built about a million-and-a-half houses a year so. Two-and-a-half million is a tremendous overhang, and excess inventories are the mortal enemy of prices. What may happen here is that now that the robo-signing flap is settled and the servicers, the big banks settled for $25 billion with the various state attorneys general and the federal government, they've been holding off on foreclosures because they had enough bad PR. Now they've settled that. I think they're gonna go back to foreclosures. I'm looking for another 20% decline."

Seems to make sense, but if you look at the Vegas reports, cash in flowing into RE and properties days on market is really dropping. Still most of it is investors compared to families, but time will tell.