SubscribeZillow Tells Tales Of Housing Woe … Meanwhile, Back At The Ranch, Multiple Offers Are Back In Vogue…An Object Lesson In “All Real Estate Is Local”
February 11, 2008
Embargoed for release until 9:00pm (hence the 9:01pm time stamp!) is the news that Zillow has just released their Q4 2007 analysis. It ain’t pretty.
Giant swathes of the country are bathed in the bright red color of price decreases and upside-down homeowners…here, for instance, is the national map of homes with negative equity. The bubblistas are gonna love this one!
Here’s how to interpret that map: 50% or more of the homes bought in 2007 in, say, Modesto are now worth less than what the owner still owes on the property. Sounds pretty grim, and it certainly is if you’re one of those homeowners…especially since we Californians have taken it as our God-given right to have property appreciate steadily year on year.
Here’s a map I’d like to see: the percent of homes bought in 2005, 2004, 2003…pretty much any year going back which are now “under water.” Instead of bloody red color so much loved by the bubblistas, we’d see a map bathed from sea to shining sea — including even the fabled fruited plains themselves — would be painted a joyful bright green, the color signifying “0% to 10%.” In fact, the map would have to be modified to show the precise number 0%.
Moral of that story: I feel your pain, trust me. If you bought a home in 2007 in Modesto, and life circumstances force you to sell it in 2008…your life sucks. Absolutely. But what about those who can stick it out for 2, 3, perhaps 5 years that this market will remain sucky for much of the country? Life for them won’t suck. Absolutely.
Let’s examine San Mateo County. Zillow’s “Z-index” for the whole county shows a 5.5% drop — that’s right, a drop — quarter on quarter. Translation: If in 2007 Q3 you bought a hypothethical home that covered the entire county, that home’s value dropped by 5.5% by Q4 of 2007.
Sounds grim, right? Again, let’s look at the whole story…
Here’s a city-by-city heat map of price appreciation from Q4 2006 to Q4 2007 … and in this map, red is good (at least for homeowners; for perma-renters and bubblistas it gives heartburn.)
Interpretation:
Huge swathes of San Jose, the East Bay and further inland, plus some pockets of the Peninsula — like East Palo Alto and South San Francisco and Redwood City — are down, in some cases dramatically. Most of the Peninsula, however, saw price increases from 2006 to 2007; in particular, the marquee towns of Palo Alto, Menlo Park, Atherton, Cupertino, Los Gatos, and Saratoga saw prices go up 10% or more.
Folks, it’s a mixed message out there: a lot of the country is in pain. But just remember this, as always: Real estate is local, local, local. Just because prices in Vegas haven’t fallen doesn’t mean you should sell your particular home and live in a tent. You need to look at the price trends in your neighborhood.
Oh, and the “multiple offers” mentioned in the title? Here’s a small sampling of what the rumor mill says has happened in the last week…
- Saratoga — $1.8M – ish –> 15-20 offers (two incidents)
- San Carlos — $850K – ish –> Two properties sold with a combined 13 offers. (Hat tip to Arn Cenedella, a Menlo Park Realtor, for providing that particular juicy piece of gossip.)
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9 Responses to “Zillow Tells Tales Of Housing Woe … Meanwhile, Back At The Ranch, Multiple Offers Are Back In Vogue…An Object Lesson In “All Real Estate Is Local””
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Thanks Kevin — I’m pretty sure you broke the story this time with your 9:01 post time
Look at SF and The North End! On FIRE!
It’s like the rain it may appear the whole area got rain but certain area got more than others. So lesson is treat each home sale or purchase individually and if you don’t have to sell and live in those red areas I would wait for 7+ years.
[...] Zindex change of -8.3% for all homes combined, so we seem to be in agreement. But, parroting the Real Estate is Local mantra, we need only check out the colors of the area heat map markers in San Diego County to [...]
[...] Zillow Tells Tales Of Housing Woe Meanwhile, B… Embargoed for release until 9:00pm (hence the 9:01pm time stamp!) is the news that Zillow has just released their Q4 2007 analysis. It aint pretty. Giant swathes of the country are bathed in the bright red color of price decreases and upside-down homeownershere, for instance, is the national map of homes with negative equity [...]
Kevin,
It seems bad news sells and gets clicked on much more so than the good news.
Here in Sacramento as I’m sure in many other areas hit hard by the foreclosure dog, there are still neighborhoods within the region that have taken on very little of a hit. It’s all about location, location, location…as we well know.
Great article and superb illustrations.
the bubble, the housing crash, the blah blah blah….who sells their house after one year anyway? Real estate is a long term investment much like other investments. The potential for a short term gain is there but the risk is also high. Home owners are buying(no pun intended) into the hype.
[...] Indianapolis St Louis St Paul Columbus Chattanooga Clearwater San Francisco Bay Area [...]
We are in one of the worst parts of the red areas on the West coast of Florida and we have two houses right now with multiple offer that are NOT short sales and NOT fire sale prices, although they are good values. This all encompassing look at real estate and the scare tactics that go along with it are not helping anyone!