Zillow Q2 RE Update

Zillow_re_map

map courtesy of Zillow Real Estate Market Reports 

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Check out that map above; its from RE website Zillow.com. I haven’t mentioned them in a while, and since we last looked at them their site really seems to have gotten built out nicely. I am going to include them, as well as RealtyTrac, in my missives more frequently. I am very much interested in finding alternative to the shill site and data assembled — and dissembled — by the National Association of Realtors (NAR).

Here are the details from Zillow’s most recent discussion on RE transactions. Suffice it to say the Housing backdrop is, to quote Merrill Lynch Economist David Rosenberg, decisively negative:

• 24% of Homes sold in the past year were sold at a loss; 

• 29% of Homes purchased in the past five years are “upside down” — i.e., have negative net equity;


• Median home values are down a record 10% over the past year; this is the largest year-over-year decline since 1996.

• Foreclosed homes account for 50% of all home sales in some markets;

• 90% of US Homes had positive annualized appreciation over the past five years;

• Home values are now deflating in 85% of the country; 

• Q2 is the sixth consecutive quarter of home value declines;

• Almost 15% of housing sales are now foreclosed transactions;

• Over the past 5 and 10 years, the nation has shown positive rates of appreciation of 4.4% and 6.5% respectively.

Pretty astounding data points.

Here’s your Ubiq-cerpt:™

The increasing rates of negative equity coupled with rising rates of foreclosures continue to have an impact on the macro real estate market. To help monitor these effects, Zillow has added new measures to its reports under the label Distress Signals, which tracks, by quarter, the percentage of homes sold for a loss and the percentage of homes sold in foreclosure, dating back to 2003. Nationwide, nearly one in four (23.7%) homes sold during the past year sold for a loss while nearly 15 percent of sales were foreclosures(5). In parts of California, more than 60 percent of homes sold in the past year were for a loss while homes sold in foreclosure exceeded 50 percent. In New York- Northern New Jersey-Long Island MSA, which has the lowest rates of foreclosure among the markets monitored by Zillow, the percentage of homes sold for a loss since the second quarter 2007 is 8.8 percent and the percent of homes that sold in foreclosure is 3 percent.

In many markets, the rate of these Distress Signals is two to three times what was reported just a year ago. For example, 32.7 percent of homes sold in the second quarter were sold for a loss and 18.6 percent were foreclosure sales compared to the year-ago quarter when the rates were 12.2 percent and 7 percent respectively. In the San Francisco-Oakland-Fremont MSA, for example, nearly half (48%) of all homes sold in the second quarter recorded a loss while 34.3 percent were foreclosed; however, just a year ago, the rates were 14.9 percent and 10.7 percent respectively.

One last data point worth considering: Most homeowners live in a town not unlike Lake Wobegon, where everybody is above average, according to Zillow.  A recent Homeowner Confidence Survey shows "62% of homeowners
think their home value increased or stayed the same in the past year;
75% expect their home value to increase or stay the same in the next
six months." Based on the Q2 Real Estate Market Reports, 77% of homes actually declined in value over the past year.

Luckily, its always some other guy’s house, and not yours . . .

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Source:
U.S. Home Values Drop Nearly 10% in Q2 Leaving Almost One-Third of Homeowners Who Bought in the Past Five Years Underwater on Their Mortgages
Zillow Real Estate Market Reports, August 12 2008
http://zillow.mediaroom.com/index.php?s=159&item=65

Zillow Real Estate Market Reports
Second Quarter: April-June 2008
http://www.zillow.com/reports/RealEstateMarketReports.htm

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What's been said:

Discussions found on the web:
  1. Lawrence Yun commented on Aug 18

    You don’t trust my interpretation of the data, Barry?

  2. Barry commented on Aug 18

    No more or less than your predecessor

  3. johnnyvee commented on Aug 18

    Barry: What’s with all the housing articles lately? Your kicking a dead horse.

    ~~~

    BR: Especially since Housing has bottomed!

  4. jmay commented on Aug 18

    “Ubiq-cerpt” doesn’t exactly roll off the tongue, does it. I’m not sure that trademark is going to be very necessary.

    ~~~

    BR: Google it!

  5. Sheryl King commented on Aug 18

    NAHB signals weaker sales ahead

    The National Association of Homebuilders (NAHB) housing market index remained at 16 in August, the lowest in the 23-year history of the series signaling that home sales will remain weak over at least the next couple of quarters.

    Prospective buyers still shying away from market

    There were slight up-ticks in both present and future sales in August. However, the traffic of prospective buyers remained at historic low after 3 consecutive months of sharp decline. The overall index picked up in the Northeast and the Midwest, but the struggle continued in the hard-hit Southern and Western regions.

    Indeed, the West saw another 3-point drop to 11 in August.

  6. hello commented on Aug 18

    on a related note, FNM/FRE below Bastille Day lows.

    and given the lack of ad hominem attacks, curses at Greenspan and anonymous-internet-yelling, everyone must still be in the South of France or the Hamptons.

    Wonder how much of today’s move is algorithm trading and how much of it is sellers hurrying to get out even with the anemic volume. ….and no one in financial MSM-land really talking about SSEC’s monday close. Wonder how the Chinese manufacturers are reading the Christmas season.

    just some random, unanswerable thoughts.

  7. wnsrfr commented on Aug 18

    Zillow has my home in Marblehead, Ma. pretty much close to the 2006 value, which is pretty much close to its top value over the last 10 years, and about 220% of my cost basis (10 years of ownership).

    So, should I think I’m special or believe their analysis? Is there a special word combining statistics, analysis and irony that describes this?

  8. Douglas Watts commented on Aug 18

    Most homeowners live in a town not unlike Lake Wobegon, where everybody is above average, according to Zillow.

    As my wife says, no country goes around yelling, “We’re Number Two !!!”

  9. Steve Dallas commented on Aug 18

    How this for some contrary indicators…Friday I play golf with a friend. At one point he ticks off how much his house has lost value. Compares it with other suburbs and the city.
    Very next day I’m talking to the guy who lives next door. He does the same thing.
    Wouldn’t this be an indication of a bubble if they were the other way around. Intersting.

  10. Nick commented on Aug 18

    A recent Homeowner Confidence Survey shows “62% of homeowners think their home value increased or stayed the same in the past year; 75% expect their home value to increase or stay the same in the next six months.”

    Good thing they don’t put actual house prices in the newspaper or on the business channels. Then there would be complete panic… or so much propaganda that 92% would think their home increased in value.

  11. Pool Shark commented on Aug 18

    Hate to say it Barry, but Zillows’ “Zestimates” are nothing more than wild-ass guesses carried out to two decimal places.

  12. PR commented on Aug 18

    Some time ago you wrote a post linking to a mashup that showed foreclosures not just by ZIP but by address. Could you please post the link again. Thanks.

  13. CJ commented on Aug 18

    Great map. It really shows the concentration of disaster in the southwest and Florida. Bend-Redmond-Sisters (in central Oregon) really is a notable outlier. BTW, the “Lake Wobegon effect” occurs in many things, and is essentially a psychological projection of how a person is emotionally invested in something – often something that they have financially invested in. I first noticed it with cars, but it’s ubiquitous.

  14. ben commented on Aug 18

    A recent Homeowner Confidence Survey shows “62% of homeowners think their home value increased or stayed the same in the past year; 75% expect their home value to increase or stay the same in the next six months.”

    Uh… where did they survey these people??? I’d like to think I associate with a fairly large group of friends/family, business associates. etc. I don’t know anyone saying this sort of thing and I don’t even live in a very hard hit area.

    Interesting to see that State College PA has one of the few increases on the map, must be all the retirees opting for Joe Pa games instead of buying a still overpriced home in Florida.

  15. Frank commented on Aug 18

    I wish firms like Zillow who quote stats like “29% of homes purchased in the past five years are “upside down”…” would add some context. For example, what percentage of total homes in the U.S. were purchased in the past five years? I actually saw one version of this Zillow statistic quoted last week that conveniently left out the “…purchased in the past five years…” part, leading the reader to conclude 29% of all homes are upside down. Pretty big difference…

  16. Thomas Shawn commented on Aug 18

    I can handle 10% down since I was 120% up from 1999 to 2005.

    This is like a normal fibonacci retracement on a healthy stock.

    Tom in central Mass.

  17. Curiouser & Curiouser commented on Aug 18

    Just an amusing note – Notice how Ca and FL are black and blue? I live in SoCal and I definitely feel bruised from this market!

  18. Curiouser & Curiouser commented on Aug 18

    Just an amusing note – Notice how Ca and FL are black and blue? I live in SoCal and I definitely feel bruised from this market!

  19. Curiouser & Curiouser commented on Aug 18

    Just an amusing note – Notice how Ca and FL are black and blue? I live in SoCal and I definitely feel bruised from this market!

  20. Curiouser & Curiouser commented on Aug 18

    Just an amusing note – Notice how Ca and FL are black and blue? I live in SoCal and I definitely feel bruised from this market!

  21. Curiouser & Curiouser commented on Aug 18

    Just an amusing note – Notice how Ca and FL are black and blue? I live in SoCal and I definitely feel bruised from this market!

  22. Curiouser & Curiouser commented on Aug 18

    Just an amusing note – Notice how Ca and FL are black and blue? I live in SoCal and I definitely feel bruised from this market!

  23. Curiouser & Curiouser commented on Aug 18

    Just an amusing note – Notice how Ca and FL are black and blue? I live in SoCal and I definitely feel bruised from this market!

  24. larster commented on Aug 18

    I sold my house in Chicago in 2002. Zillow now lists it as 7.3% over the price that I received. Given a 5% RE commission, I think that they are reasonably accurate and present a very sober view of home prices in Chicago at least. I might add that the house is in a subdivision w/ 1/3 acre lots, it’s own subdivision swimming pool (unusual for Chi) and within 10-15 min commute to Motorola, Ameritech, Sears, Zurich american, etc. Sobering indeed.

  25. Zill-laugh commented on Aug 19

    Thank you, Nick, for your accurate “‘Zestimates’ are nothing more than wild-ass guesses carried out to two decimal places.” Zillow stats are fluffy as a Pillow. You can throw 90% of them away and the rest are lucky coinflips.

  26. Charleston Real Estate Blog commented on Aug 19

    Oh Zillow Oh

    I was surprised to see Zillows Q2 real estate update get coverage at face value without a discussion

  27. Renting in Mass commented on Aug 19

    I agree that Zestimates are fluffy, but that doesn’t make all of the data useless. There’s no guesswork in calculating the percentage of foreclosures and sales at a loss.

  28. Patrick commented on Aug 19

    I’ll take this opportunity to complain (again) that Houston, which has been the 4th largest city in the USA for more than 20 years, does not show up anywhere in these housing statistics.

    Who needs to be kicked in the pants (again)?

  29. Patrick commented on Aug 19

    I’ll take this opportunity to complain (again) that Houston, which has been the 4th largest city in the USA for more than 20 years, does not show up anywhere in these housing statistics.

    Who needs to be kicked in the pants (again)?

  30. Brett commented on Aug 22

    Brett Shaw from Cyberhomes:

    It’s amazing to see that California and Florida are the two destinations that are getting beaten up throughout all this. I’m glad I live in the Midwest.

    I’ve heard enough about people thinking that their home’s value has increased or stayed the same. It hasn’t. Wake up and ride it out. Still, if this report is based off of the zestimates then I’m going to take it with a grain of salt.

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