Tim Edwards, Chief Residential Appraiser at Pacific Appraisers, will be on the panel discussing the new Collateral Underwriter and its impact on appraisers. To get more information on the event and topics that will be covered click here.
By Ken Harney
Excerpts: Zillow CEO Spencer Rascoff…says Zestimates are “a good starting point” but that nationwide Zestimates have a “median error rate” of about 8%.
Shoppers, sellers and buyers routinely quote Zestimates to realty agents – and to one another – as gauges of market value. If a house for sale has a Zestimate of $350,000, a buyer might challenge the sellers’ list price of $425,000. Or a seller might demand to know from potential listing brokers why they say a property should sell for just $595,000 when Zillow has it at $685,000.
My comments: Ken Harney is well know, nationally syndicated real estate writer. We are hoping that a lot of people read this article so they understand the pitfalls of relying too heavily on Zillow. Zillow does have a great data base of sales and wonderful graphs, but their Zestimates have a large margin of error. AVM’s like Zillow work best in conforming neighborhoods with homes that are less than 10 years old.
What do you think about Zillow? Post your comments.
Here is a great article with charts and graphs for housing trends in Silicon Valley: San Mateo, Santa Clara, Santa Cruz, Monterey, and San Benito counties. It goes into housing supply and median values for both single family residences and condos/townhomes. Click here to see article.
Single Family Residential Report
The median value for single-family homes in Santa Cruz County took a slight dip from last month, but is still above the November 2013 median value. The following is a snap shot of recent market statistics covering the single family housing market in Santa Cruz County. The analysis presents a broad-brush overview of market indicators such as median sales price, month’s of inventory, and sales volume.
Median Sales and List Price
The median selling price of a Santa Cruz County single-family home increased last month on a year-to-year comparison. The median sales price of such a home was $663,750 in November 2013 versus $685,250 in November 2014, a boost of 3.2%. Last month, the median sales price was $716,615.
Source: MLSListings.com (As of 12/11/2014 )
The inventory of active listings has long been a vital leading indicator of housing market dynamics. Ultimately, the inventory ratio provides the best predictor of near-term market direction and one of the major keys to understanding price shifts in the market.
There was a 2.9 month supply reported in November 2014. This is down from last year and below the historical average of approximately 6.0 months. At three months of inventory, the median sales price will likely continue to climb.
Another indicator of market dynamics is the number of days a property is on the market prior to being sold. As demand increases and supply shrinks – the time it takes to sell a property will decrease. For days on market, the median tends to be a better indicator as the average can easily be skewed.
Source: MLSListings.com (As of 12/11/2014 )
Historically, days-on-market for a home in Santa Cruz County ranged from 15 to 128 days, and averaged 47 days. Currently, the November 2014 median days on market is 36 days, comparable to the 34 days reported in for the same time period last year.
Limited supply and pent up demand will tighten the ratio of sale to list price. Historically, sellers have been able to command approximately 98.0% of asking. The November 2014 sale-to-list ratio is 98.8%, which is just slightly above the 98.2% reported in November 2013.
Number of Sales and Number of Active/Pending
The volume of single-family home sales was down slightly. Last month, 124 single-family homes were sold in Santa Cruz County, compared with the 138 sales in November 2013; a decrease of about 10.1%. Active and pending homes have seen a more significant jump. In November 2014, there were 351 active listings compared to the 498 reported in November 2013. The decline reflects a shrinking inventory, but also is indicative of the winter cycle.
For those of us in the real estate market, it comes as no surprise that there is a seasonal pattern to home sales data. In general, the changes that we’re seeing are typical for a winter pattern. Values appear to be stabilizing somewhat in the Santa Cruz County market. The year-over-year growth for November was 3.2%, and month’s supply has been on the rise. As of right now, the current market activity supported by historical trends suggests slow but modest price increases in the Santa Cruz County single family residential market.
Corelogic released its November San Francisco Bay Area housing market report today. Home sales dropped to the lowest level for the month of November since 2008, the result of a limited number of homes for sale, cautious buyers, a challenging mortgage market and a quirk of the calendar that resulted in a relatively low number days for recording deals. The single-digit, year-over-year rise in the median sale price was the lowest since May 2012. See below for a chart of the # of homes sold and median prices per county.
Total November Home Sales
in the San Francisco Bay Area counties
|Homes Sold||Median Sale Prices|
|All homes||Nov-13||Nov-14||Percent Change||Nov-13||Nov-14||Percent Change|
Single Family Residential Report
Values for single-family homes in Santa Cruz County continue to rise, but the number of active and pendings reached a four-year high last month. The following is a snap shot of recent market statistics covering the single family housing market in Santa Cruz County. The analysis presents a broad-brush overview of market indicators such as median sales price, month’s of inventory, and sales volume.
There have been a couple of great blog posts where appraisers have compared their appraised values of properties to zillow’s estimate. A quick summary of two of these blogs is listed below:
- Appraiser 1 – Sample properties: 25
- This Appraiser’s values averaged a 19% difference from zillow’s estimate
- Appraiser2 – Sample properties: 20
- This Appraiser’s values averaged a 20% difference from zillow’s estimate
There can be a lot of potential issues that arise during an FHA real estate appraisal inspection. This can be a frustrating experience for a homeowner and real estate agent, as they will typically get feedback from the lender that there are certain items that must be repaired before closing. It is a good idea to be prepared in advance by correcting any of the issues mentioned below before the real estate appraiser performs an FHA inspection. The FHA Appraiser is looking for the following items:
19 active listings under $250k
121 active listings between $250k- $500K
47 active listings between $500-$750K
20 active listings between $750k-$1,000,000
16 active listings over $1 million
The Salinas market is very active in the $250,000 to $500,000 range. The number of homes for sale under $250,000 is about the same as the number of homes for sale between $750,000 to $1 million. The median home value for Salinas rose 21.38% from August of 2013 to August of 2014. The current median home value is $352,000.
In summary, the overall single family market has been strong over the last 12 months and the Salinas market is not showing any signs of slowing. It will be interesting to see what happens over the next several month. If you have any questions, please feel free to call us anytime at (831)607-3800.
Pacific Appraisers’ Ryan Whitelaw MAI and Karen Park MAI will be attending the Appraisal Institute annual fall conference in San Francisco. See below for more details:
Location: Marriott Marquis, San Francisco
Plan now to join us for the Northern California Chapter’s original award-winning signature conference. Proudly celebrating 64 years!
16 Breakout Sessions include:
Units of Comparison and Sale Price Adjustments for Small Residential Income Property
Marketing, Scaling, Non-Lender Work & Changing the Way You Do Business
The Price is Right: Cost of Entitlements
California Water: From the Sky to Ownership
Appraiser DNA: Hiring & Employee Development
Compliance: Learn it. Live it. Love it.
Complex Valuation Issues in Ad Valorem (and many other) Appraisals
Going Concerns: Mind Your Business (and Equipment)
Green Building 2014: Risks and Opportunities
Data Trends and Data Science: Statistical Methods and Analysis
Carbon, Climate and California Policy
The Appraisal of Contaminated Real Estate
Residential Market Update
Retail Market Update
Real Estate Capital Markets Outlook