TheTucsonFoothills

quarter 1 housing price data, the national scene vs the Tucson Foothills

There's been a lot of housing news in the news today since the National Association of Realtors® released quarterly sales figures for homes in 149 metro areas. And with an average drop in the median sale price of 7.7%, and 100 of those metro areas reporting a drop in the median sale price, first quarter this year vs last, the news is understandably downbeat.

But before we get on to the NAR report and the national media's slant on it,  I'd like to get this out of the way.
The median sale price in the Tucson Foothills is down just .23% for the 1st quarter of 08 vs 1st quarter of 07. That's not a typo.
.23%. Less than 1/4 of 1% drop in the median sale price in the Tucson Foothills.

That's good news if you're selling your home in the Tucson Foothills, and it's good news if you're buying a home too. Because it indicates that this market has been more resilient to the price swings that are wreaking havoc in those other 100 markets that the National Association of Realtors® cites in their report. The NAR report indicates that the median sale price is down 7.7% nationally, and down 8.8% in the Tucson metro area.
And I'm sure that's true, but of course they don't break out the figures for the Tucson Foothills, so I thought I would, before anyone jumps to conclusions and assumes (it's easy to do with all those headlines coming at you) that prices in the Foothills are also way down. They're not. A .23% drop, from $540,000 in 07, to $538,750 in 08.

From the national media,

The Wall Street Journal -
Losing Cities, and Some Winners, in Q1 Housing Price Data The National Association of Realtors‘ quarterly numbers on home prices in metro areas were out this morning, and they don’t paint a pretty national picture. The Associated Press noted that the price declines in 67% of the areas surveyed in January-March was the largest percentage of declines since the survey started in 1979.
Sacramento-Arden-Arcade-Roseville area in California was down 29%, Riverside-San Bernardino-Ontario was second, with cities such as Lansing, Mich.; Grand Rapids, Mich.; Sarasota-Bradenton-Venice, Calif.; Miami and San Diego among those filling out the bottom 10

CNN.com- Home prices continue sharp descent
Single-family home prices dropped 7.7% in the first quarter in the largest year-over-year decline since the National Association of Realtors began reporting prices in 1982.

This one from BusinessWeek is my favorite though.
They use the bleak housing news as a springboard to take a (deserved) swing at National Association of Realtors®.
From BusinessWeek Online- NAR puts a good face on some really ugly housing data It must be be getting tough for the National Association of Realtors to put a positive spin on the real estate market when prices in most of the more than 150 metro areas that it monitors are down and, in many cases, way, way down.
But the group and its optimistic chief economist Lawrence Yun appear to be up for the challenge, judging from the May 13 first-quarter single-family home press release with the title: “Mixed Home Price Performance Continues in Metro Areas, One-Third Show Gains.”

Oh well, apparently the NAR is determined to continue singing their own song, while marginalizing themselves and their members. nevertheless, all real estate is local.

see my web site thefoothillsToday.com
to search for and learn more about Tucson Foothills Homes

have you heard, The Housing Crisis Is Over

Today's Wall Street Journal says so,
The Housing Crisis Is Over, so it must be so.
"The dire headlines coming fast and furious in the financial and popular press suggest that the housing crisis is intensifying. Yet it is very likely that April 2008 will mark the bottom of the U.S. housing market. Yes, the housing market is bottoming right now".

Although there's scant evidence to support it, either in this article or elsewhere, I'm glad we've finally got that cleared up - The Housing Crisis is Over.
We were going to pull out of this sometime, so we might as well get it over with now.

As you might expect, everyone's going to jump on this news as if it were the Holy Grail.
And despite the fact that the article doesn't refer to a particular city, or area, or part of the country where the 'Housing crisis is over', and by the way, whatever happened to 'all real estate is local', it instead seems to predict that as of today the national housing market is on the mend.
How can that be. Is Tucson going to climb back to a normal market in lock-step with Miami, Vegas and Sacramento.
Is the Los Angeles market going to suddenly fall in line so that it's in sync with Salt Lake and Seattle.

Or could this be the national media sensing the need for a change of tune, to keep their almighty drums beating loudly.
Check out your local market, and see if you see signs that the housing crisis is over.
I hope it is.

see my web site thefoothillsToday.com
to search for and learn more about Tucson Foothills Homes

these guys don't mince words

No data, no statistics, just a tell it like it is Sunday read on the state of the market (in the DC area) by two industry veterans

How does this market compare with others you've seen?
Foster: I've never seen anything like it.

Foster: But this damn thing we're in here now is another one that's giving us hell. I mean, pure hell. We're sweating.

McEnearney: And it has extended for a longer period of time. We've been in this for two years now. I started noticing a decline in the "energy" in the market, if you will, in the fourth quarter of 2005.

McEnearney: If they don't price it right, it's gonna kill 'em.

Foster: You've got to price it right.

McEnearney: I think sellers are getting more accepting about the prices they can get now, but not enough, because homes are still remaining on the market.

Foster: If they've got a real need to sell, they do [accept the lower price]. They have to have a real need to sell, otherwise they don't.

Foster: My pick is the third or fourth quarter, we'll see a little bit of pickup. Next year will be fair. Certainly by 2010 there's gonna be so much damn pent-up demand.

From an interview in the Washington Post with John McEnearney, 81, founder of McEnearney Associates, and P. Wesley Foster Jr., 74, founder of Long & Foster Real Estate
Brokerage Barons See Washington Making a Slow Recovery

see TheFoothillsToday.com
to search for and learn more about Tucson Foothills Homes

do you see trouble or opportunity in the land of the fabulously wealthy

Today I read two interesting but somewhat contradictory real estate articles about the fabulously wealthy.
The first in The New York Times Hints of Fear in the Land of Mansions about the slowdown of the market in Greenwich, Conn., long home to the fabulously wealthy. 
Sales are down 39% from last year in Greenwich, where they call the $2.0 to $4.0m price range, the meat and potatoes houses.

At the more respectable end of the Greenwich market, Mel Gibson's got his place for sale for $39,000,000 and Leona Helmsley's 40 acre spread is listed at $125,000,000.
But even in the rarefied air of Greenwich, the downturn is causing a touch of panic. A home that was recently listed for $11.5, then shamelessly reduced to $8.5, finally sold for just $6.9.  
What's the world coming to!

Realizing that other sweet spots in our hemisphere are experiencing similar downturns, I concluded that buying a second, or third home, perhaps in the Tucson Foothills even, would be last on the
to-do list of these hopelessly stressed lords and ladies of the manor.  

But then I picked up the Wall Street Journal and read
Sunny Side of the Street, America's wealthy see buying opportunities in sluggish real-estate market , (this may require a subscription, if so, let me know and I'll email it to you)
(reading it, I wondered, could this just be Rupert having fun, in a not so subtle poke at his new rival, The New York Times)

The Journal presented a very different side of the real estate street, as perceived by the wealthy. From the article,
"While many average Americans are skittish about the housing market, some of the country's richest citizens see the current conditions as perfect for buying, according to the Annual Survey of Affluence and Wealth in America..."
"Seventy-seven percent of the wealthiest people surveyed think real estate presents a "real opportunity" right now"
"And these high-income earners are putting their money where their mouths are: 40% said they are in the market to acquire real estate this year"
And get this,
"Forty-one percent of those in the wealthy category said owning a second home was "almost a requirement" for people of their economic means, according to the survey"  tsk- tsk, but of course.

I'm confused, but I'm glad I read this one last, I prefer Rupert's take on it.

see my web site thefoothillsToday.com
to search for and learn more about Tucson Foothills Homes

I've been seduced by staging, have you

Staging homes that are for sale has become a much used marketing tactic in the real estate business. Staging's been lauded, applauded and ballyhooed, about how staging your home will lead to a quicker sale and a higher price.
And in my experience, that's often true. Well staged homes sell quicker and for more money, because they look better.

And that's exactly why, as a buyer, when you walk into a staged home you should have all your antennae up, and look at them more carefully and with a much more critical eye.
It's easy to be seduced by staging.

I know from personal experience. I was seduced by staging long before staging was even a twinkle in a Realtors eye.
Many years ago when I was living in Chicago a friend told me about a loft for sale that he thought I'd like. It sounded great, so I went by to see it right away, and wow, this was the real thing.

A converted warehouse building in the River North section of Chicago, with tall wood beam ceilings, wide plank wood floors, a long row of 10' feet tall double hung windows, a freight elevator, and 2100 sf of open space. I was sold the second I walked in the door, but not by that stuff. 
 
The guy that owned the loft was a well respected artists rep, painters and sculptors were his speciality. So the tall brick walls were hung with big abstract art pieces, and here and there throughout the space were these really cool sculptures. Even in the bathroom.
Holy Cow! This wasn't just a loft I was buying, it was an art gallery. cha-ching cha-ching I bought it on the spot.

Once he moved out, along with all the great paintings and sculpture and bathroom art, and I moved in with my meager belongings, it didn't strike quite the same note of cool and sophistication. 
And it didn't look anything like an art gallery. cha-ching cha-ching
Know what you're buying.

see my web site thefoothillsToday.com
to search for and learn more about Tucson Foothills Homes

every down cycle is the beginning of the next up cycle

so says John Burns Real Estate Consulting in this delightfully simple cartoon that brings some perspective to the current real estate cycle

homeowners who won't cut the price

' Overall home sales have fallen a remarkable 33 percent since the summer of 2005

Home prices, on the other hand, continued to rise until 2006 and are now only 5 to 10 percent below where they were in mid-2005

In most other areas of the economy, this combination of plummeting sales and stable prices would not happen. When demand for airline tickets drop, the airlines cut their prices until they have sold their seats. When stocks become less appealing, share prices fall

Real estate, though, is different. For both economic and psychological reasons, there is no asset more conducive to hopeful overvaluation '

From an article in today's New York Times by DAVID LEONHARDT
Be It Ever So Illogical: Homeowners Who Won’t Cut the Price

There's not much in this article that's revolutionary, or that we haven't heard before, but David Leonhardt says it all very well, and at times like this it bears repeating. And while I like the comparison with stock prices - as I've used it a number of times, sometimes even successfully, with stubborn sellers - the band-aid analogy really cuts through the clutter.
 
' In many ways, it would be better if the housing correction would happen more swiftly and sharply. The pain might be worse, but it would be over quickly. We seem to understand this principle when we’re removing a bandage. Why, then, is it so much harder with housing?'

see TheFoothillsToday.com
to search for and learn more about Tucson Foothills Homes

life without a connection

About 10 days ago our cable connection went down and stayed down for about 14 hours. We had no access to the internet and no TV.
We had no idea what was happening in the world, I couldn't do my real estate business and we couldn't communicate with people via email. And we communicate with a lot of people via email.
Our daughter's in Greece finishing (I pray) her last semester of college, so we do a lot of email with her.

And even though some people still send out recipe cards and football schedules, and call that, well I don't know what they call it, but the real real estate business is done online now.
The MLS, property research, property tax records, communicating with clients, blogging, even writing contracts, it's all online.
Even my fax is internet based, efax.com.

When I write contracts and related paperwork for home buyers & sellers it's usually done online with a program called HotDocs.
I fill it all out online and email everything to the buyer/seller for their review and signatures. It's very slick. There's no generation loss that occurs when you fax and refax, up to date versions of current and past contracts are stored online for as long a you want, and changes and revisions are a snap.
It works great, but you've got to have a connection, or you're out of business.
 
Now our cable connection is down again.
It's 4:30 PM here in Tucson and I'm writing this offline, and waiting for service to resume, but I have no idea when that will be.
Comcast is our service provider, and of course you can't get anyone  on the phone, you can't even get through to Comcast to find out what the &%&^&% is going on or when it will be fixed.

It's now 5:45 and the TV is back on, but still no internet.
I don't care about TV, I never watch it. I rent movies.
I want-need the internet.
6:05 PM and the internet is back, and I'm back in business.
Thank you comcast. That wasn't too bad.

see TheFoothillsToday.com
to search for and learn more about Tucson Foothills Homes

the SmartMoney's on Tucson

"Not all places are created equal when it comes to weathering economic woes like the current real estate slump, credit crunch and slowing job market. Choosing the wrong place could carry serious ramifications"

From an article in SmartMoney, the Wall Street Journal magazine of personal finance and investing, that has named Tucson, AZ one of the 7 places to retire during an economic downturn.

7 Places to Retire During an Economic Downturn

Unlike other lists of ' best places to do this or that', and because SmartMoney is a magazine of personal finance, the focus here is on choosing cities not only based on lifestyle and a sunny climate and such, but on making a choice that makes good economic sense. 

                "Tucson is a dynamic, growing   retirement spot ..." 

"Expect real estate prices to remain solid, thanks to increasing interest in the area ..."

7 Places to Retire During an Economic Downturn

see TheFoothillsToday.com
to search for and learn more about Tucson Foothills Homes

herd behavior helps explain the housing debacle

Robert J. Schiller, Yale economist extraordinaire and author of Irrational Exuberance, who predicted both the stock market bubble of 2000, and the current housing bubble, holds forth in an interesting article in this past Sunday's  The New York Times 
How a Bubble Stayed Under the Radar

    We have to consider the   possibility that perfectly rational people
        can get caught up in a bubble

He talks about why even most experts didn't recognize the housing bubble as it was forming, the cascade of information that led people to make the wrong decisions, and how herd behavior helps to explain the housing debacle.                 

Interestingly, and in conclusion, he states, " it is now possible that a downward cascade will develop — in which rational individuals become excessively pessimistic as they see others bidding down home prices to abnormally low levels"

Flipping back to August 2005,  The New York Times did a piece on Mr Schiller back then titled, Be Warned: Mr. Bubble's Worried Again
where Mr. Schiller is described as follows, ' Mr. Shiller is sounding the same warning for real estate that he did for stocks. In speeches, in television and radio interviews and in a second edition of his prophetic 2000 book, "Irrational Exuberance," he is arguing that the housing craze is another bubble destined to end badly, just as every other real-estate boom on record has'.

it's always interesting to see what changes and improvements new owners have made to a house

I spent the other day previewing about 10 homes that are for sale in the Tucson Foothills. Most of these are homes that were recently listed for sale, and I had either not seen them before, or I hadn't seen them since they last sold, and now they were on the market again.
It's always interesting to see what changes and improvements new owners have made to a house.

The homes ranged in price from about $600K to $1,000,000, and ran the gamut from fairly predictable new frame-stucco construction to 1949 vintage adobe charmers. In the Tucson Foothills there's such a variety of homes, and particularly amongst the older homes, lots of surprises and often unimaginable features and idiosyncrasies,
that previewing is often a 'who'd a thunk it' experience.

I had a special interest in seeing one of the homes on my list, because I had seriously considered buying it the last time it was for sale in the fall of 2006. It was a gorgeous masonry built home on a wonderful lot with mountain and city views, and with many nicely done custom features and finishes, all meticulously maintained, furnished, landscaped and presented.
It was very appealing, and it showed perfectly.

Except that in my opinion, it was also very overpriced.
So after haggling with the listing agent over the price, and not getting anywhere, we decided to walk away.
But I also felt that it was one of those 'have-to-have-it' houses, and that someone would come along and 'have-to-have-it', regardless of price. And someone did. A short while later it sold for full list price.

Now it's on the market again, and sadly, this time as a short sale, and listed for $100,000 less than it sold for in 2006. But it doesn't look like a 'have-to-have-it' house anymore. I think the bank may have to drop it another $100K for somebody to feel like they 'have-to-have-it' this time round.

As great as it showed back then, that's how bad it shows now.
It's vacant, really dirty, there's trash everywhere, the landscaping's neglected and overgrown, it looks as if they were raising farm animals in two of the bedrooms, light fixtures aren't working or missing completely, a couple of doors are off their hinges, big rips in a few screen doors, it looks like it is, abandoned.

But it's all simple stuff as far as I could tell - 3 days with a good handyman and a cleaning crew - to make it presentable to sell, maybe $2500. And a new owner, they might want to put 6 or $7000 into it, to really get it back to where it was.

But apparently the banks don't see it that way. They have a new twist on marketing. Sell it at it's worst, get pennies on the dollar, and whine about your losses to your stock holders and the press.

improved traffic as a result of sharply lower mortgage rates and further declines in home prices

Every week I get an email from a couple of very reputable local lenders here in the Tucson Foothills with their latest mortgage rates.
Last week the rate for a 30 year conventional loan was
5.625% w/0+0 OR 5.375% w/1 point. That's a pretty great rate.
And it got me wondering how low rates have to go before home buyers can't resist anymore, and start jumping back into the real estate market.

And every month I participate in a real estate survey conducted by  Bank of America that's designed to help them gauge housing market trends. Not, what's in - fluorescent light bulbs, what's out - shag rugs, kind of trends, but market trends.
Is the real estate market improving or declining, and what are the signs that point in that direction. 

And every month, after they've gone through and compiled all the data, Bank of America has been nice enough to send me the results of their survey.
It's a big fat report that runs about 60 pages, and it's full of data, charts, graphs, and the opinions of the Bank of America analysts about the relative strength or weakness of the real estate market, and where it's headed and why they think so.
I've been doing this for about 18 months now - and during that time the real estate market has been in decline. And the survey results have consistently reflected that decline. Inching lower and lower every month, with increasingly grim opinions from the analysts at BofA.
And then today I got the results from the January survey, and for the first time, Bank of America was singing a different tune.

Our 12-month thesis on the sector. We have a positive bias toward
homebuilding stocks. We believe the combination of improving affordability and severely curtailed construction activity will help to remedy the current supply demand imbalance.

Our call today in a nutshell. Our traffic index increased to 37 in January from 28 in December, as agents noted improved traffic as a result of the sharply lower mortgage rates and further declines in home prices. We believe that affordability is the key determinant of sales and that the downturn in sales activity since mid-’05
was driven by the lack of affordability as home prices and mortgage rates both increased and limited the pool of potential buyers. We think the improving affordability will translate into better sales activity as the year progresses, but acknowledge that it is significantly dependent on mortgage rates.

Risks to our call. Continued lack of mortgage capital would lead to further troubles. On the other hand, a significant decline in mortgage rates would aid affordability and stimulate demand.

... a positive bias toward homebuilding stocks,

...improved traffic as a result of the sharply lower mortgage rates and further declines in home prices

...improving affordability will translate into better sales activity as the year progresses ...             

What do you think.
Have you noticed a change in the market for the better, or for the worse, and where do you think it's headed.

new home builders, not here

If you haven't read it yet, BusinessWeek has a fine piece of reporting on the latest round of extreme price slashing by big builders, and the results, pain and repercussions that it's causing.
Housing: That Sinking Feeling

Fortunately for us in the Tucson Foothills, there are no big builders operating here. This is mostly a resale market, with only a handful of new homes being built, here and there, by small local builders.
So we haven't had the large-scale speculative over-building and investing, nor the Boom to Bust price swings experienced by communities in Las Vegas, Phoenix and elsewhere.

selling your home online

Yesterday the Arizona Daily Star online had an article titled
Selling home online can net a hefty gain. The author, Marshall Loeb, tells us ' Despite the recent housing market slump, many Americans are still paying a walloping 6 percent commission to real estate brokers'. He gets it wrong right out of the gate. It's not despite the recent housing market slump that many Americans are paying a walloping 6 percent - if anything, the slump has caused people to continue to use proven methods to try and sell their home & not experiment with methods that have been much less reliable, even in the best of times.
When many thousands of homes are listed for sale on MLS's all across the country, and sitting on the market for months, most home sellers would not choose to drastically reduce the amount of exposure that their home is getting to potential buyers on the chance that they may save a couple of percent in commission.
He then states that Many homeowners are now opting to market their property directly to the consumer using online services like Yahoo Real Estate and Craigslist. And he ties that in with- 80% of those searching for a home use the internet. Leaving you with the impression that it's simple to sell your home on the internet by using Yahoo and Craigslist, because, 80% of the home searches are being conducted on the internet, on sites like Yahoo and Craigslist.
In fact the great majority of the searches of those 80% searching online are doing so on real estate brokerage web sites and MLS's, not on Yahoo or Craigslist. Because those real estate brokerages and MLS's have made all their listings available for people to search on the internet. Yahoo and Craigslist are great sites, but they contain just a teeny tiny fraction of the homes for sale. 
Then, ' Six percent may not sound like much, but consider: According to the U.S. Census Bureau, the average price of a home is $313,000, which means the average seller has to pony up nearly $19,000 in broker fees. This is a hefty penalty for not selling your own home, one that more and more Americans are unwilling to pay'.
Mr. Loeb consistently uses 6 percent as the amount of commission charged by real estate brokers, leading you to believe - intentionally it seems since I'm sure he knows otherwise- that it's 6 percent, like it or not, with no choice for the consumer. 
In fact there is a whole range of choices in the services offered by various real estate brokerages and the cost of those services, just like in every other industry and business in this country.
But it's a very convenient omission on Loeb's part, since it allows him to tell the story the way he wants, without being hindered by the facts. And again simplifying beyond belief, the $19,000 savings is offered as a given, with no mention of the possible trade-offs involved, or the fact that this $19,000 savings assumes that the buyers are also not represented by an agent, hence no commission.
A very unlikely scenario.
And whether the commission is 6, 5 or 4 percent, or whatever it is, it's not a penalty, it's a fee that's paid for services rendered.
And the fee is only paid if the home sells. No sale, no fee.
In that same vein of characterizing a fee for services as a penalty, would it be correct to consider the cost of an ad in the Arizona Daily Star (which you pay for whether or not it works), or, the cost of a subscription to the Star, to be a penalty.
We can choose, and increasingly many of us do, to sell our cars, used furniture and other stuff on the internet for free, and not put an ad in the Star. And we can read the news all day long on the internet for free. Why pay a penalty to the Star to subsidize these fairy tales.
Then Mr Loeb talks with Colby Sambrotto, chief operating officer of ForSaleByOwner.com, a leading online home marketplace, who says
(surprise-surprise) "Selling your home online is simpler than you might think", and then goes on to list the three simple steps to sell your home online and on your own, and how to accomplish each of them. (For the details read the article HERE)
1. Find out what your home is worth
2. Market your property
and, 3. Transfer the title
That's it, it's childs play, easy as 1,2,3.
This article would be laughable really and it's hard to believe that anyone would take it seriously, nevertheless, the glaring omissions and blatant oversimplification misinform and mislead on a subject that's important to me and to lots of other people.

Hot Home Design Trends

If you're thinking of renovating the kitchen, or just planning to freshen things up with a coat of paint, check out this report from CNNMoney.com about design trends that will be high on homebuyers wish lists. 6 Hot Home Design Trends for 2007

no such thing as bad press'

It's interesting that eppraisal.com - the latest home valuation tool - has so far garnered very little popular attention, either from the traditional media or from the blog world. I wonder if that's because eppraisals claims are less bloated, and in my opinion more plausible and realistic than those of Zillow - which is exactly what has caused many of us to bitch about Zillow to no end- but no one's bitching about eppraisal, because their claims are more plausible, so there's not much to bitch about, and maybe they're a little bit invisible because of it. Meanwhile, Zillow continues to press the 'there is no such thing as bad press' advantage, and now with a big assist from the National Community Reinvestment Coalition (NCRC) and their filing of a complaint against Zillow with the Federal Trade Commission.
Prior to this complaint, I was beginning to sense that Zillow, with all their brouha and bloated claims, had in an ironic twist lowered the bar of expectation to such a point that it was contributing to an increasingly frivolous regard for Zillow by reasonably informed people. And now this complaint, and whether or not you agree with the validity of it, I hope we can agree that it would be a good thing for Zillow and for the people who use Zillow, if Zillow, very simply and prominently and consistently displayed accurate information about the limitations of Zillow and Zestimates. But then we'd have nothing to bitch about.
For more on my beef with Zillow, see - Your edge in Real Estate? and seller gets zillowed and new ways to value your home, and your neighbors

Your edge in Real Estate?

On their website Zillow makes the following claim, In Big Print at the top of the page
Free, Instant Valuations and Data for 67,000,000+ Homes
A little further down the page Zillow tells us why we should use them
Why Use Zillow
>Buyers: Compare values to avoid overpaying
>Sellers: Use our tools to help set a price
>Owners: Track your most important asset
That seems like a simple, straightforward and unambiguous claim.
But a lot has been written about the claims that Zillow makes, and much of it has called the accuracy of those claims into question. I did a post about it back in August new ways to value your home, and your neighbors and I netted out by saying ...I think that at this point these are interesting, innovative services that are fun to play around with, and that may be useful in providing a broad value range. But I also think that Zillow and Reply should back off on the claims they each make on their homepages...or at the very least provide a big warning on the homepage that advises people that these valuations cannot be counted on to be accurate - Do Not make financial decisions based on them. It's too important.
And now, from RealtyTimes via Yahoo
Zillow Gets FTCillowed
...the National Community Reinvestment Coalition (NCRC,) which has just filed a consumer protection complaint to the Federal Trade Commission (FTC) alleging that "Internet financial services and real estate provider Zillow.com is misleading consumers, real estate professionals and financial service providers in on-line home valuations."
Zillow responds, "We believe these allegations are groundless. As we say consistently and prominently on our Web site, Zillow is a free research tool for consumers, and Zestimates are designed to be a starting point for consumers who want to learn about the value of homes. We make every effort to explain on our site the role of Zestimates as a research tool, as well as to clearly display our rates of accuracy for every area we cover."

fanning the flames

                                             was this THEN
Business: National home sales hit a record 6.1-million
BUYERS GRAB 6.94 MILLION PREVIOUSLY OWNED UNITS
Existing homes set records in terms of sales and prices in June
USATODAY.com Feb. new-homes sales climb 9.4%, biggest jump in 4 years
April existing home sales soar past targets to record level
Housing market showing little sign of slowing...
How high can they go? / Single-family homes' overall median price ...

                                            is this NOW
Emaciated sales leave area real estate agents hungry for business
Forecast sees housing prices falling - Yahoo! News via Moodys.com
How low will real estate go? - Buying a House - MSN Real Estate
Real Estate Recession Coming - September 12, 2006 - The New York Sun 
New-home prices likely to fall for 1st time since '91
Report sees double-digit declines in home prices
US home prices to fall next year too - Moody's

None of this news was accurate back then, and it's not accurate now, for most states or cities and towns across the US. Some of it was true to some degree in some places, some of the time. But that's about it. At best it's a generalization or perhaps, dare I say it, it's sensationalism. It's what the big media does. But when we're inundated with news like this day after day - whether it's good news or not so good news - it's almost impossible to remember that real estate is local and that what's happening in Talahassee has little or nothing to do with Tucson. But this barrage of headlines from the media is influencing the decision-making of buyers and sellers in local markets, and often to their detriment. One of the side-effects of this media blitz is that local markets are becoming a little less local because the news is fostering a kind of herd thinking.
In Tucson, home sales are generally slower this year than they were last year. But some parts of town and some price ranges are doing better than others, some are doing even better than last year. And I'll bet that's true in many cities and towns across the US.
So don't make your decision to buy or sell a home based on what you hear from the media. Get a true current picture of your market, find out how homes are selling where you live, in your price range, in your part of town. 
For a bit of perspective, plus the latest on Tucson Foothills Home Sales, check out;
Foothills Market Trends &
The Latest-Tucson Foothills Sales Activity, 10/8
It's accurate, it local and it's up to date.
It was THEN and it is NOW.                                    

the great divide

There's a great divide in the real estate industry.
I'm talking about the divide between those real estate agents who are using the latest technology to learn, acquire and do business, and those who are not. And it's a very lopsided divide, with relatively few agents on the technology side of the aisle, while the majority seem to ignore technology or make believe it doesn't exist. Seems like they don't care about learning how technology can help them despite the overwhelming evidence that consumers care about it, and are using it in staggering numbers to more efficiently find, become more informed about and to conduct their real estate transactions. And despite the flurry of new technology-based real estate models that offer consumers new services, information and new ways of doing business that often don't include a real estate agent.
This is not like the dotcom boom of the late 90's with its wildly inflated expectations for transforming the world. This technology is here and it's being adopted and used by ordinary people every day, and it's getting better all the time. It's not going to go away.
Are Zillow, Reply.com, Propertyshark or Craigslist going to wipe the traditional real estate companies off the map? I don't think so. I believe that most people are still going to want the help and advice of a good Realtor with such a large and complicated transaction.
But the benefits of technology and the innnovations being introduced by the Zillows et al are attractive to many consumers, and increasingly these innovations will have far-reaching effects, directly or indirectly, on the way homes are bought and sold and who facilitates those transactions.

how do you take it, live or online

This week I'm taking the 24 hours of continuing education classes that are required by the Arizona Department of Real Estate so that I can renew my real estate license at the end of this month.  I waited until the last minute, I always do, so now I'm hustling to get it done. And I'm doing it online.
The online classes are really convenient because you can do them anytime you want, 24/7. You can start and stop them at your whim, take a lunch break, do an hour at 4 in the morning if you can't sleep, and pick it back-up at 9 that night.
And if you've got a lot of stamina you're allowed to do up to 9 hours in one day, that's three classes per day, so in three days you're done.
I don't have that kind of stamina, I'm doing one class a day.
It's very convenient. All you need is a computer with a high speed connection and a quiet place where you can concentrate.

On any Sunday

Some people poo-poo Open Houses.
Amongst other things, they say the only reason agents hold open houses is to try and pick up unrepresented buyers, and not to sell the home being held open.
And that the internet has made open houses a less valuable marketing tool.

Not so.
They don't get the unique benefits that an Open House offers.
The first goal of an Open House is to sell the house, no kidding! But an Open House offers a unique opportunity to do just that.
The second goal is to get feedback straight from the people that count, from potential buyers, about that house.

don't get swept away

just about every expert, every economist, real estate guru and other see-er's of the future who are interviewed by the national media - and many of them are these days- all predict more dark clouds ahead in residential real estate. Given the incessant drum-beat of gloom & doom it's easy to get swept away.
But real estate is local, it's not national. What's happening in Topeka has little or nothing to do with Talahassee or Tucson. If you want to buy or sell a home, don't depend on the national media to understand the conditions in your local real estate market.
The national media reports the big picture, national conditions.
What's important to you is what's happening in your local market, where you live.
Find a local expert where you live that knows their stuff and that you trust.
Find out what's happening where you live and make your decisions based on that.
don't get swept away.

7 Economists weigh in

The Wall Street Journal brings us the opinions of seven economists on whether the latest housing data is idicative of a continued decline or the start of a turn-around in the housing market.
Read it Here

seller gets zillowed

Last week I posted a story about Zillow.com & Reply.com, the new and newest web based real estate valuation services - new ways to value your home, and your neighbors.
I thought this would be a good time to compare the two services, and pit them against what are real world values for recent home sales in the Foothills area of Tucson AZ.
Well it's happened, someone got zillowed.
'A home seller tells RealtyTimes he is contemplating contacting an attorney over losing a sale he blames on Zillow's estimate of his home.'

Dear Blanche:
I read your article about Zillow.com and would like see your advice on my situation. We started selling our house but potential buyers showed us a Zillow.com price estimation for our house and told us that our selling price was not realistic. As a result of this we had to...

See full story Including the excellent response from RealtyTimes columnist Blanche Evans- ...'new companies posting public housing data have immunity from the responsibility of potentially harming individuals.'
In my post last week I concluded that, at this point these are interesting, innovative services that are fun to play around with, and that may be useful in providing a broad value range. But I also think that Zillow and Reply should back off on the claims they each make on their homepages; or at the very least provide a big warning on the homepage that advises people that these valuations cannot be counted on to be accurate - Do Not make financial decisions based on them. It's too important!
Let's get the word out, before more people fall for this.