The Truth About Homeowner Equity

The Truth About Homeowner Equity | Simplifying The Market

The Truth About Homeowner Equity

A recent article from a reputable news source was titled: Here’s why some homeowners still can’t sell. In the opening bullets of the article, the author claimed, “Negative equity is one of the main reasons why there are so few homes for sale.” The article then goes on to soften that stance but we want to bring better clarity to the equity situation.

A Tale of Two Markets: A 6-Month Update

A Tale of Two Markets: A 6-Month Update | Simplifying The Market

A Tale of Two Markets: A 6-Month Update

Six months ago, we reported that the mismatch between the type of inventory of homes for sale and the demand of buyers in the US was causing the formation of two markets.

You Don’t Want to Hear This from Your Listing Agent

You Don't Want to Hear This from Your Listing Agent | Simplifying The Market

You Don’t Want to Hear This from Your Listing Agent

You’ve decided to sell your house. You begin to interview potential real estate agents to help you through the process. You need someone you trust enough to:

Which Homes Have Increased in Value the Most?

Which Homes Have Increased in Value the Most? | Simplifying The Market

Which Homes Have Increased in Value the Most?

Home values have risen dramatically over the last twelve months. The latest Existing Home Sales Report from the National Association of Realtors puts the annual increase in the median existing-home price at 5.6%. CoreLogic, in their most recent Home Price Index Report, revealed that national home prices have increased by 6.7% year-over-year.

Central Mass Home Appraisals Robot Leaves Room for Error

In the Terminator movies, a robot from the future (Arnold Schwarzenegger) hunts down

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the human heroine in order to change the future by altering the past. Although that’s actually the present. It’s complicated and maybe confusing.

Although considered science fiction, the same thing is happening right now in the realm of Central Mass home appraisals! Now, before any Central Mass readers panic, there’s no immediate danger to the community. The authorities have the situation well in hand; in fact, the robot in question has already been hauled into court. There’s certainly nothing that could affect any individual Central Mass homeowner, that is, unless your own house is about to be entered into the Central Mass listings pool.

First, about the robot: this is not the Terminator (Arnold) himself. In real life, if you saw him in the supermarket or walking down the street, there would be nothing to fear at all. In real life, he is an actor/Governor who is actually an American/Austrian who is a conservative/liberal and in no way the fictional robot character who was the antagonist/protagonist featured in the Terminator movies.

Neither is the robot that lurks in some online listings: the home appraisal robot. It, too, is nothing to fear, even though it has probably already visited your house without your knowledge. This robot comes from the Zillow website, and its name is “Zestimae.”oooh!  It means no harm and is doing the best an automated home estimate robot could be expected to do (although it’s no RVM/REALTOR® Valuation tool.) Any unintended consequences of what happens when it visits your house are, as the phrase indicates, unintentional.

About that court case: the online information company Zillow publishes a dollar figure that its robot calculates for most U.S. home addresses. It is featured as its “Zestimate” of a property’s market value. An Illinois realty lawyer has sued them because she claims that in her case that number is so low and off-kilter that it has materially hampered the sale of her condominium. State law has it that nobody can publish an appraisal without permission of the property’s owner. Zillow says that the $ number it calls its “Zestimate” is not an appraisal at all: instead, it’s an “estimated market value.” Zillow managed to get the lawsuit dismissed but there is still the reality of the accuracy of a Zestimate.

How this might affect your own Central Mass home is because prospective buyers might visit Zillow to see what the robot thinks your own property is worth, and be slightly misled. Zillow admits that, compared with actual sale prices, their Zestimate number has a median error rate of 5% (not bad) but that it’s only within twenty percent 89.7% of the time. A 20% error would be terribly misleading; especially when it happens more than one out of ten times.

The fact is, this robot doesn’t come from the future like the Terminator. Its numbers are based solely on publicly recorded information, which may be outdated, incorrect, or, most likely, unable to factor in anything other than basic square footage and general

© gustavofrazao/Adobe Stock

comps. What the Zestimate cannot account for are things like how upgraded, or outdated, or depressingly dark, or delightfully light, or if traffic-noise heavy, or how majestically awe-inspiring the subject property actually is in comparison to the comps used to calculate the Zestimate. When human beings aren’t involved at all, the subject property itself is not actually compared. I think there is room for this kind of automated approach. It can be fun and interesting to look around a neighborhood to see how various individual properties fare, even if the numbers aren’t to be taken too seriously.  As the name implies, it’s really just an estimate.

But when the time comes to actually sell your own Central Mass home or to start looking in earnest for a house you will be calling home for many years, that’s no time to rely on anything less than comparables and guidance researched by a living, breathing real estate professional. In other words, when the information needs to be right—call me!…..Realty Ace, LLC

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Thinking of Selling your Home? Competition is Coming

Thinking of Selling your Home? Competition is Coming | Simplifying The Market

Thinking of Selling your Home? Competition is Coming

The number of building permits issued for single-family homes is the best indicator of how many newly built homes will rise over the next few months. According to the latest U.S. Census Bureau and U.S. Department of Housing & Urban Development Residential Sales Report, the number of these permits were up 7.7% over last year.

What to Look for in Your Real Estate Team

What to Look for in Your Real Estate Team | Simplifying The Market

What to Look for in Your Real Estate Team

How do you select the members of your team who are going to help you make your dream of owning a home a reality? What should you be looking for? How do you know if you’ve found the right agent or lender?

More Than Half of All Buyers Are Surprised by Closing Costs

More Than Half of All Buyers Are Surprised by Closing Costs | Simplifying The Market

More Than Half of All Buyers Are Surprised by Closing Costs

According to a survey conducted by ClosingCorp, over half of all homebuyers are surprised by the closing costs required to obtain their mortgage.