Pricing Calculator for Today’s Market

Last night I was tossing around the idea of a calculator that determines a realistic value of a house in today’s market, based on what year it was purchased and how much was paid. This morning I spent some time with javascript, and the result is below.

I welcome any feedback. Keep in mind that this obviously is just a rough approximation based on broad market indices, it does not factor unique circumstances to individual houses, and it does not constitute legal advice, blah blah blah…

Enjoy.

  

About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

109 comments:

  1. 1
    Alex says:

    As a move-up buyer, I’d love to find 1+2 below:

    1) someone willing to buy my house per the calculator above;
    2) someone willing to sell me their (larger, fancier) house using the calculator above;

    Rate this comment: Thumb up 0

  2. 2
    tarzanchuck says:

    It seems a little over-simplified. Just by taking my house in particular, which I purchased for $176k in 2001, this calculator comes back with a value of $242k, which is way below current market value. I know that in my neighborhood, similar houses are selling for between 290-330k, depending on condition and whether or not it’s on a busy street. In fact, in Lynnwood right now where I live there are only 4 homes listed at or under $250k and all are about 1/2 to 1/3 less square footage and on smaller lots.

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  3. 3
    tarzanchuck says:

    Alex – LOL.

    Rate this comment: Thumb up 0

  4. 4
    hzg says:

    Sometimes “we can” doesn’t mean “we should”

    In this case “we can” has yet to be proven

    Rate this comment: Thumb up 0

  5. 5
    David McManus says:

    In fact, in Lynnwood right now where I live there are only 4 homes listed at or under $250k and all are about 1/2 to 1/3 less square footage and on smaller lots

    Check back with me in a year to see if this still the case.

    Nice idea with the calc, Tim. I still think a lot of sellers out there need to be humbled. Humbled in the sense of bringing them to reality. “No, the sh*tbox that you bought in 05 is not worth 30% more than you paid for it”

    Rate this comment: Thumb up 0

  6. 6
    Keith says:

    Ah, a textbook example of “ceteris paribus” modeling. How handy when you want to rule out any other factors which don’t match your preconceived notions!

    Rate this comment: Thumb up 0

  7. 7
    jon says:

    Focusing on the past and expecting the market to work the way you think it should work is a good way to miss opportunities that come along. Some people saw the combination of low interest rates and great job market in Seattle and made the post of that. Doors like that don’t open up every day, and you need to keep one step ahead to find them. Looking at the market and wishing it were different is not going to help.

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  8. 8
    monkey says:

    We will see more housing drop in North Snohomish County. There are lots of homes in Lynnwood priced over 500K, that’s crazy. Wake up seller.
    http://www.heraldnet.com/article/20080805/BIZ/389232806#Biotech.firm.cuts.president.22.other.jobs

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  9. 9
    WestSideBilly says:

    Not sure why, but I get a lot of comma errors that result in truncating results when I use the calculator.

    IE I put in 250000 and that truncates to $250,00 and results in $36,xxx.

    Rate this comment: Thumb up 0

  10. 10
    Groundhogday says:

    “way below current market value”

    That is the whole point. Current market values are far above fundamentals, and that is why market values are falling. This calculators will give you a good idea Tarzan of how far your home value will fall. According to this calculator, your neighborhood will see a 16-26% correction which really isn’t all that dramatic compared to most neighborhoods in the US.

    Simple, yes… but I think Tim’s model does give us a good rough benchmark for the magnitude of the correction. It doesn’t account for the recent overbuilding and ongoing credit contraction, however, so home prices could actually fall considerably more than 16-26%.

    Rate this comment: Thumb up 0

  11. 11
    The Tim says:

    WSB, what browser are you using? I tested it in Firefox 3.0, IE 6, and IE 7, and it works fine for me in all those…

    Rate this comment: Thumb up 0

  12. 12
    Jon says:

    Tim,

    While I feel this is an excellent gut check for sellers, the truth is that this calculator is just wrong.

    This shows that if you purchased a home in 2005, you should expect to lose a couple percent. Even in your worst case scenario, this won’t be true, much less hold water.

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  13. 13
    WestSideBilly says:

    And, for what it’s worth, this is probably a gross oversimplification of what any given house is worth.

    Rate this comment: Thumb up 0

  14. 14
    The Tim says:

    Jon @ 12,

    This shows that if you purchased a home in 2005, you should expect to lose a couple percent. Even in your worst case scenario, this won’t be true, much less hold water.

    Um, that scenario is already happening around Seattle. Check out some examples here.

    Rate this comment: Thumb up 0

  15. 15
    WestSideBilly says:

    Tim: Firefox 2.0.0.14

    Most of the errors are display errors, except for fringe cases (can’t display 8 sig figs ($9000000 in 2000 -> $13,297,09 in 2008).

    Rate this comment: Thumb up 0

  16. 16
    jesse says:

    5% appreciation is “reasonable”? It depends upon the type of dwelling but condos should not be appreciating at 5% unless wage growth is 5% as well. Detached possibly 5% since the land is appreciating due to densification but a condo/apartment only depreciates since most of the cost is the building and only wages (not greater expected productivity of the land) must support the prices.

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  17. 17
    Bits_of_Real_Panther says:

    It’s closer than I’d prefer to admit on my little starter house in SnoCo. That calculator might be a good start if you are thinking about making an offer on a property, especially in the City

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  18. 18
    tarzanchuck says:

    understood.

    Rate this comment: Thumb up 0

  19. 19
    monkey says:

    WestSideBilly, are you using a Mac computer? You can just enter the first 3 numbers (ex: if you bought it in 2000 for $200,0000, just typed in $200, and enter, it will give you the result. I had the same problem like you when I first enter. Hope it will help.

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  20. 20
    The Tim says:

    Ideas to improve the calculator:

    • provide results as a range of values
    • improve cross-browser compatibility

    Anybody got any other specific suggestions?

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  21. 21
    softwarengineer says:

    THE CALCULATOR MAKES HORRIFYING ERRONEOUS ASSUMPTIONS

    1. The mortgage interest rates remain flat, i.e., at 5.5% 30 yr fixed.

    2. The collapsing bank’s loan qualification process doesn’t go to like post 1990 bubble tougher requirements: i.e., 30% maximum of “net pay” [not gross] household income after debt [100%] of all payments reduce it too. That’s the maximum monthly payment folks, even after the contract substantially increases the jumbo loan after a year so. Hardly no one will be able to afford nothing without 40-60% down payments.

    3. Wage increase assumptions exclude the top 1% of Seattle incomes…..reduce the wage increases about half with this more realistic assumption for avg household incomes. The American Bureau of Economic’s agrees with me.

    4. We don’t collapse into a far more severe recession/depression next year or by 2010, with even more horrifying job butcher axing. Sooner perhaps? Remember, the current ludicrous unemployment rate excludes give-ups, two incomes to survive, undocumented worker butcher axing, and almost all of the RE and home building crowd working on contracts. The real unemployment rate is actually 15-20%?

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  22. 22
    olaf says:

    I’ve run a few recent sales I know of through the calculator, and it’s pretty darned close. (By recent, I mean since April or May, when loans started drying up and reality started leaking into the Seattle bubble.)

    Our landlord was planning a condo conversion in 2005, and the real estate working with him said our apt would sell for about $700K. He held off selling; now the same agent is quoting $600K. That’s actually below your calculator.

    But single-family homes are holding up a little better. In ’05, we looked at a nice house a block from Green Lake. It was asking $630K. Now it just sold again… for $630K.

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  23. 23
    tarzanchuck says:

    What this calculator does is assume that with a 5% apprecation long term and assuming a continued decline that prices won’t level out for 2 years. So it doesn’t calculate current market value, it calculates what the home value should be if 5% apprecation had happened since 2000. So it doesn’t calculate current market value.

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  24. 24

    So at some point this assumes that market value and “actual value” will meet, and this makes sense. The house I own is worth about 275,000, according to the above calculator. But if we’re assigning 5% annual growth, next year it should be worth about 289. I could currently sell my house right now for about 320, but if prices fall 10% in the next year, I should be able to sell the house then for about 289!
    So house prices ultimately revert to the mean…After the next twelve months then, if prices are continuing to drop and are priced less than the calculator values, does that mean it’s a good, or at least better time to buy?

    Rate this comment: Thumb up 0

  25. 25
    AlexN says:

    Two suggestions:

    1. Simple one. To make appreciation rate a variable.
    2. More complex. To provide a different appreciation/depreciation rates for array of years..

    Rate this comment: Thumb up 0

  26. 26
    tarzanchuck says:

    If you were using this calculator for advice, it would be telling you to sell now, then buy again in 2-3 years.

    Rate this comment: Thumb up 0

  27. 27
    David McManus says:

    If you were using this calculator for advice, it would be telling you to sell now, then buy again in 2-3 years.

    Then why is every real estate “professional” telling me that now is the time to buy?

    Rate this comment: Thumb up 0

  28. 28
    tarzanchuck says:

    Because they’re not using this calculator for advice.

    Rate this comment: Thumb up 0

  29. 29
    Groundhogday says:

    “If you were using this calculator for advice, it would be telling you to sell now, then buy again in 2-3 years.”

    Not necessarily.
    1) Transaction costs run 10%+.
    2) It might be very difficult to actually sell a house at current “market” pricing. When a real estate market starts heading down the first thing that happens is a fall off in transactions. It takes a while for sellers to realize the market has changed, so significant price drops take a bit of time.
    3) If you really wanted to come out ahead, the time to sell was a year ago.

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  30. 30
    tarzanchuck says:

    Groundhog is right about the time to sell.

    Rate this comment: Thumb up 0

  31. 31
    tarzanchuck says:

    “Then why is every real estate “professional” telling me that now is the time to buy?”

    Because it’s their job and they’re trying to earn a living.

    Frankly, I think the best time to buy will be in December this year, right after Christmas, depending on how the presidential election goes. But then again, I have a more optimisitic view of when housing prices will start to recover than seems to be commonly shared on this website.

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  32. 32

    “Then why is every real estate “professional” telling me that now is the time to buy?”

    Not “every” real estate “professional”. Not this one. But you could do worse than buying now. You could have bought last July..

    Rate this comment: Thumb up 0

  33. 33
    David McManus says:

    Sorry, Ira, I didn’t mean to generalize.

    Most, not every.

    Rate this comment: Thumb up 0

  34. 34
    Ray Pepper says:

    Nop Nope Nope. Calculator does NOT work. When you Buy GEMS throw the calculator out the window. My residence is MLS # 25032497 that I bought in 5/05 the day it went on the mkt for 300k It will sell in a blink at 435k.

    Another 269k bought in June 2007. listing # 27165144. I fixed it up and coudn’t sell it for 369k. It will sell in a blink now for 325k.

    It doesn’t matter when you buy. It matters what you buy and what you pay for it. Always look! But, only buy GEMS! Even now what you think maybe a GEM could be a turnip. Always do your DD and know how to buy!

    Ray Pepper
    http://www.500Realty.net

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  35. 35
    Zintradi says:

    so does this work for the tacoma area? my house came up a little light…

    bought for 179k in 1/2004… based on whats selling around me, I could probably fetch 220k after listing it for 230k.
    per the calculator, it is worth 205k

    Also, just refinanced, and they appraised it at 230k I think that’s a little high, but it got me a 30 yr fixed at 6% so i’m happy to sit put for a while.

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  36. 36
    Monica says:

    According to that calculator our house is worth 305K, which is what I expect we’d get for it if we sold. A nicer house up the street sold for $315K 2 years ago. Not all neighborhoods “bubbled up” to the same degree.

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  37. 37
    Madrona says:

    Monica (@35) brings up a good point. A Seattle-area blanket calculator like this is inherently inaccurate. A cardinal axiom of RE is “Location, location, location”. This does not take into account the location of the property.

    Even as discussed on this blog a few weeks back ( http://seattlebubble.com/blog/2008/07/28/june-neighborhoods-months-of-supply-update/ ) depending on area within this region inventory level is variable. Then we start to run into supply / demand.

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  38. 38
    deejayoh says:

    I fixed it up and coudn’t sell it for 369k. It will sell in a blink now for 325k.

    It doesn’t matter what it will sell for. it’s what you think it will sell for!

    JK Ray…

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  39. 39
    Ray Pepper says:

    LOL ……..True!.

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  40. 40
    Greg Perry says:

    The Tim,
    This is great! Will save me hours and hours of work helping sellers with value.

    Seriously,
    Zillow has really never perfected their “Zestimates”. I question it can be done with any degree of accuracy. Have you run any controlled tests against Zillow?

    Anyway, good on you for plugging away.

    Greg

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  41. 41
    Harley Lever says:

    Yeah, this is a oversimplification at it’s finest.

    What kind of shocks me The Tim is that you are such a “data guy” and are striving for the most accurate information. Yes, you did disclose that this is a rough approximation and you did do this last night (my hats off to you for that!). It just seems uncharacteristic of you. Especially considering you spanked me for the cost of living calculator yesterday. ;>)

    I would recommend that you break down the data to correspond with the different neighborhoods (700, 701, 710) etc. It would be nice to have the 2000 and the historic data up to today factored in by neighborhood. Your 2% to 30% overpriced data should correspond to different neighborhoods correct? Perhaps adding a drop-down menu to select the neighborhood. It might be interesting to see how certain areas break out. Then track it over time to see if your predictions are correct or if there are any outliers and what that could mean.

    On a side note, did you see in the Seattle MLS breakdown you posted for me, that 700 showed a 32.41% increase over last year? That cannot be right… I would love for it to be, but it has to be wrong. Any insight?

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  42. 42
    TJ_98370 says:

    The house that I live in located in Central Kitsap was built in 1988. I know the cost of construction and I know the assessed value of the land back then. The Tim calculator put the current value of the house/ land less than 1% below county assessed value, 2% below Zillow value, and 4% above midpoint of Yahoo’s real estate estimater value range.

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  43. 43
    EconE says:

    neither of your MLS #’s come up Ray. On Redfin, John L Scott nor on your own Five-Bill-Realty site.

    get with the program.

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  44. 44
    TJ_98370 says:

    Hey Grounhogday –

    How be things in Pullman?

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  45. 45
    jonness says:

    “Not sure why, but I get a lot of comma errors that result in truncating results when I use the calculator.

    IE I put in 250000 and that truncates to $250,00 and results in $36,xxx.”

    That is the behavior with Firefox 2.0. I suspect the problem is that the width of the textfield is one space less with that browser.

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  46. 46
    [troll] says:

    Tm,

    Yr clcltr s jk.

    N sllr wll sll t ths prcs, nd ncrgng yr Bbblhds t s t wll rslt n “n sl”.

    Th whl prms f ths wbst s prvdng hp fr lwr prcs, nd tryng t dscrg ppl frm byng n rdr t “hpflly” chv yr gl. Bt ll t s, s “hp”.< hrf="#" clss="rplyt" nclck="rplyt('53764','∓#91;trll∓#93;','46'); rtrn fls;">Rply – < hrf="#" clss="qt" nclck="qt('53764','∓#91;trll∓#93;','Tm,\r\n\r\nYr clcltr s jk.\r\n\r\nN sllr wll sll t ths prcs, nd ncrgng yr Bbblhds t s t wll rslt n \&qt;n sl\&qt;.\r\n\r\nTh whl prms f ths wbst s prvdng hp fr lwr prcs, nd tryng t dscrg ppl frm byng n rdr t \&qt;hpflly\&qt; chv yr gl. Bt ll t s, s \&qt;hp\&qt;.','46'); rtrn fls;">Qt

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  47. 47
    Roger Bintner says:

    Great idea- try http://www.homevalence.com they have a few more variables built into their forecast tool. Start with your purchase price and date, add your zip code and the results are calculated for your neighborhood. Add your mortgage and interest rate for a true rate of return!

    Rate this comment: Thumb up 0

  48. 48
    mikal says:

    When the hell did this pansy site get censoring? You must be kidding. Harvey you must start posting more often.

    Rate this comment: Thumb up 0

  49. 49
    mikal says:

    Just as I thought. RAL’s comments are being censored before posting. Another joke.

    Rate this comment: Thumb up 0

  50. 50
    Scotsman says:

    Interesting- put my house right about where i think it would sell, and agrees with a realtor’s market valuation i got last week. It’s about 2% below Zillow, and 20% below the current assessment. Assessments in my area tend to run pretty high based on appreciation that hit several years ago. I doubt they will drop unless appealed, or for a new sale.

    While the calculator may be usefully, it doesn’t take into account the economic changes on the horizon which suggest prices will drop further. To be honest, if I had any thought of selling in the next five years, I’d sell now, and accept that whatever I got would be more than I might get for a decade or more.

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  51. 51
    Scotsman says:

    Greg- what’s the value of running controlled tests against Zillow if Zillow isn’t accurate?

    Rate this comment: Thumb up 0

  52. 52
    Harley Lever says:

    Yeah Mikal,

    I saw the same thing. Unbelievable!!!

    What Goes Up Must Go Down was swearing up a storm at me in the “When would you leave Seattle Post” (hilarious by the way) and RAL get’s censored???

    This is beyond the pale. I guess that The Tim can no longer brag about how he doesn’t delete comments.

    I guess we have now experienced the FREEDOM OF SPEECH BUBBLE.

    I am sure it is only a matter of time before the rest of us are censored.

    You have to ask yourself how much legitimacy can this site have when bashing real estate professionals for “holding all the information” when the Seattle Bubble censors it’s users?

    Oh I get it… It’s in honor of the Beijing Olympics!!!! Xi Xi

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  53. 53
    [troll] says:

    knw m bng cnsrd.

    Bt,

    Rntrs r lsrs.

    nd tht’s fct Jck.< hrf="#" clss="rplyt" nclck="rplyt('53772','∓#91;trll∓#93;','53'); rtrn fls;">Rply – < hrf="#" clss="qt" nclck="qt('53772','∓#91;trll∓#93;',' knw m bng cnsrd.\r\n\r\nBt,\r\n\r\nRntrs r lsrs.\r\n\r\nnd tht\'s fct Jck.','53'); rtrn fls;">Qt

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  54. 54
    Harley Lever says:

    RAL,

    I guess you will have to email us you comments and we will post them for you. Of course, it will only be a matter of time before we are all censored.

    I guess what might be appropriate under the NEW REGIME is to provide us a list of the rules.

    LET THE GROUP THINK CONTINUE!!!!

    Rate this comment: Thumb up 0

  55. 55
    [troll] says:

    Fr th 60-70% tht wsh t lv Sttl wthn 5 yrs shld th Tm’s prdctd SFH prc drp nt hppn , y mght ( sd mght) gt qlfd fr mv nt frclsd dbl wd n Whnr, Lsnn.
    “Gm f dbl wd” s Ry wld sy.

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  56. 56
    TJ_98370 says:

    It seems pretty simple to me. Intelligent dissenting debate is welcome on this blog. Name calling, repetitive offensive language, and unintelligible rants are not. I figured it out without The Tim even having to tell me and I’m amongst the unelightened non-homedebtors. Go figure!

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  57. 57
    [troll] says:

    m gld tht sm r strtng t s clrly wht ths Blg s ll bt.

    Th gd thng s vry fw ppl cnsdr t crdbl.

    Th ns tht blv th skwd grphs nd ngtv cmmntry cn’t ffrd t by n Sttl nywy. Tm s prvdng hp.
    Thy prbbly cldn’t ffrd t by n Dtrt.

    Bt, Tm hs th rght t hv hs blg, jst rmmbr, t’s Tms blg nd tht ds nt mn th rls r ppld qlly t ll prtcpnts.

    d pprct th pprtnty t prtcpt, whn m cnsrd, lgh!

    S Thnks Tm, fr my dly lgh!< hrf="#" clss="rplyt" nclck="rplyt('53776','∓#91;trll∓#93;','57'); rtrn fls;">Rply – < hrf="#" clss="qt" nclck="qt('53776','∓#91;trll∓#93;',' m gld tht sm r strtng t s clrly wht ths Blg s ll bt.\r\n\r\nTh gd thng s vry fw ppl cnsdr t crdbl.\r\n\r\nTh ns tht blv th skwd grphs nd ngtv cmmntry cn\'t ffrd t by n Sttl nywy. Tm s prvdng hp. \r\nThy prbbly cldn\'t ffrd t by n Dtrt.\r\n\r\nBt, Tm hs th rght t hv hs blg, jst rmmbr, t\'s Tms blg nd tht ds nt mn th rls r ppld qlly t ll prtcpnts. \r\n\r\n d pprct th pprtnty t prtcpt, whn m cnsrd, lgh!\r\n\r\nS Thnks Tm, fr my dly lgh!','57'); rtrn fls;">Qt

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  58. 58
    Harley Lever says:

    TJ,

    I agree with your sentiments. However, RAL is certainly not the only person failing to live up to the rules. Let’s then censor EconE and What Goes Up Must Go Down.

    Chairman Tim needs to be equal with his censorship. I have been called every name in the book here and I find it slightly ironic that RAL out of all the foul-mouthed contributors to this blog get’s censored. Why do pro-bubble people get a pass and RAL does not?

    Chairman Tim needs to lay down the law for everyone so their is no misunderstanding here.

    Lastly, Chairman Tim should not boast about the fact that he does not delete or censor his posts. It takes away from his credibility when it is obvious that he does and he claims the opposite.

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  59. 59
    [troll] says:

    Hw’s tht dw 8,000 cmng Bbblhds? Dd y shrt “Bg Tm”?

    blv tld y’ll t by ndr 11k

    h wll, y cn’t gt th mrkts r Rl stt rght.

    Hng n t tht ls.< hrf="#" clss="rplyt" nclck="rplyt('53778','∓#91;trll∓#93;','59'); rtrn fls;">Rply – < hrf="#" clss="qt" nclck="qt('53778','∓#91;trll∓#93;','Hw\'s tht dw 8,000 cmng Bbblhds? Dd y shrt \&qt;Bg Tm\&qt;?\r\n\r\n blv tld y\'ll t by ndr 11k\r\n\r\nh wll, y cn\'t gt th mrkts r Rl stt rght.\r\n\r\nHng n t tht ls.','59'); rtrn fls;">Qt

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  60. 60
    The Tim says:

    Yeah, I got pushed over the edge by people being jackasses. Sue me.

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  61. 61
    LotharBot says:

    Before you throw around accusations about people being censored over minor offenses, you should be sure that’s actually the case. Could RAL have deleted his own post? Could a database glitch have wiped it out? Is it possible RAL posted other, far more abusive comments you didn’t see that were so far over the line that he really should’ve been censored?

    Many years ago, on a forum where I had previously been an admin, I got accused of deleting someone’s post. There was this huge firestorm about it, with people practically calling for my head… until I mentioned that my admin powers had been gone for almost 2 years. A lot of people ended up looking VERY stupid over that.

    It’s wiser to ask than to assume.

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  62. 62
    Harley Lever says:

    The Tim,

    If your goal is to clean up shop I am all for it.

    I would like to see some even-handedness. RAL is certainly not the only Jackass here and you have a lot of house keeping on the pro-bubble side of the debate.

    Why not censor “what goes up must go down”? Here is a quote from him “Harley you are a complete A**HOLE.” I put the asterisks in.

    Let’s clean up both sides of the debate!

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  63. 63
    Harley Lever says:

    LotharBot,

    The Tim just conceded that he has censored RAL.

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  64. 64
    TJ_98370 says:

    Harley,

    I disagree with alot of what you post, but most of the time you present your perspective as a civil, articulate, and logical person. I actually read your postings and contemplate the points you make. Don’t get distracted by others who do not want to be civil and make no meaningful contribution to the discussion. I would really like to see RAL say something other than some variation of “all renters are stupid”. I fully understood his opinion sometime before the first fifteen times he said it.

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  65. 65
    what goes up comes down says:

    Harley, you are an idiot — hey is that okay no curse words. Yeah, A##hole is real bad.

    So your name calling is not offensive?

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  66. 66
    The Tim says:

    Harley @ 57,

    Let’s clean up both sides of the debate!

    I agree wholeheartedly, and I intend to “lay down the law for everyone” first thing in the morning.

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  67. 67
    The Tim says:

    Oh and for the record, I didn’t get pushed over the edge to moderation until months after I posted the comments about not censoring things. It’s almost as if some people took those comments as some sort of challenge to see who can be the biggest jerk on the board. Not cool.

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  68. 68
    b says:

    tim –

    I am not sure why you’d want to censor RAL, if I ran this site I would just add extra banners and other ads to posts he goes nuts in. the post count usually goes ballistic when he is off his meds.

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  69. 69
    Harley Lever says:

    What Goes Up Must Come Down,

    Thank you for proving my point….

    You have been calling people idiots and swearing at people ever since I stumbled across this site.

    Can you bring anything else to the conversation?

    I would much prefer to have healthy intelligent debates with people like The Tim, TJ, and the many others here.

    If you don’t like it when some one gives it back as hard as you give it then don’t come here. You have done nothing good for this blog and you are a complete distraction. You take the conversation to the gutter and have yet to articulate anything beyond a generalization.

    All in favor of censoring “What Goes Up Must Come” say “Yeah”

    YEAH!!!!!!!

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  70. 70
    Harley Lever says:

    TJ,

    Thanks and I appreciate you saying that. I do love the debates here. Admittedly, I do sometimes get in head-butting matches with the bullies and ignorant people who sometimes post here.

    I too contemplate the other side of the opinions and believe it or not, actually agree with some of what is said. I completely appreciate the analysis The Tim does. I can say wholeheartedly that I walk away with a better understanding of what is going on and use the information to help make decisions and contemplate strategies.

    I try to give good feedback to make this blog a better and more informative resource and hope that it helps.

    I will try to ignore the character assassins, verbal abusers, and outright ignorant people… but the Bostonian in me soooo wants to give it right back!!!!!

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  71. 71
    Scotsman says:

    RAL was censored? That’s too funny. Couldn’t happen to a nicer guy…..

    In other earth shattering news the U.S. Federal Debt is now almost three times as large as the estimated number of stars in the known universe. Holy crap. A trillion here, a trillion there, pretty soon you owe some real money. Carry on!

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  72. 72
    Ray Pepper says:

    Econ E don’t be such a bone head. You obviously do NOT know how to search the MLS for listings that are not ACTIVE. My home and my rental are not Active. Do some real DD and check the SOLD and Cancelled listings.

    If you do not have access spend some money and become a member. It will keep you from searching through the Red Fin and John L Scott crapola.

    Lastly, please don’t bash our site. Just concentrate on what the woman is telling you and doing with her hands. Watch her hands. Listen to her. Then watch her hands again. Turn off the volume, and continue to watch her hands. Then slowly turn up the volume. After you do this about ten times you may see the hidden message. After realizing what she is saying then ZOOM down to the CNBC headknocker video on the bottom right. Watch it at least 5x. Then remember our spokeswoman’s hands. Get it? I hope so.

    Ray Pepper
    http://www.500Realty.net

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  73. 73
    what goes up must come down says:

    HL, I rarely say negative things about people. If you believe that is the case I could give a hoot. However, it does seem funny that anyone who you get into “head-butting matches with” are either as you say “the bullies and ignorant people”. Man you think alot of yourself.

    So you praise someone – RAL – who purposely callers alot of people here losers and then have the balls to dog about someone flipping you crap — what a joke.

    Answer me this do you think in the short term — next three years — RE in Seattle ( I will limit it to Seattle proper since you don’t seem to think outside that box) will go up or down. I mean this from today will the median price decline or increase. Do you believe three years from today the value of your condo will be greater or less than today.

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  74. 74
    what goes up must come down says:

    Weyerhaeuser cutting 1,500 white-collar jobs; most at Federal Way headquarters

    — but that’s right Federal Way isn’t Seattle proper so this won’t matter.

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  75. 75
    Buceri says:

    Yesterday NPR started “All things considered” with the lay-offs at Weyerhaeuser.

    The local correspondent Martin Kaste discussed the lay-offs and finished the short piece saying something like: “these lay-offs come after disappointing announcements from Starbucks and WAMU. The pacific NW has started to feel the full force of the national economic slow down.”

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  76. 76
    what goes up must come down says:

    B how can that be possible — Seattle is magical — oh, they said the PNW well that isn’t Seattle Proper so the magic still holds.

    Rate this comment: Thumb up 0

  77. 77
    mikal says:

    I don’t agree with some of the things listed and the way they are posted. I’m probably next.

    Rate this comment: Thumb up 0

  78. 78
    RG says:

    While I disagree wholeheartedly with RAL, and in general the vituperative comments that are flung for personal pleasure from some on both sides of the issue, folks do need to get a little thicker skin.

    Why are folks personal sensitivities so easily aroused when someone calls you a name? Ask yourself that question. The language used by the name caller is much more reflective of them, so let it stand and say what you want. Unless deep down you are what they’re calling you, and then perhaps a little counseling will help you out.

    The Tim, I understand censure since you are trying to build a business model, and some advertisers and visitors will be offended when someone uses “abusive” language. But your model was far better when it was open.

    So long as folks don’t take it into the real world, why not just let the online stuff stand as a testament to honest and open debate?

    http://www.nytimes.com/2008/08/03/magazine/03trolls-t.html

    I came to this site because it did offer interesting insights and analysis that you couldn’t find anywhere else (and still can’t I might add). It has helped me make my own decisions by considering all sides of buying a house, something I was woefully ignorant of before I began searching for a house.

    This calculator is just one more example of what the site provides. Warts and all, it provides SOME utility for people trying to get a grasp of the current situation. The Tim certainly can improve upon its capabilities, but at least he’s trying to provide value for the general house-hunting community.

    As a frequent lurker who learns much from the analysis here, I put my vote in to remove censure. In fact, I would donate money to keep it that way.

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  79. 79
    Please Buy My House, Idiot Renters! says:

    Hmmm…. How I can mock RAL if he isn’t allowed to post?

    Rate this comment: Thumb up 0

  80. 80
    being patient says:

    I thought that the purpose of this site was to inform people about the real estate prices in the area.

    Tim brings his own prespective into his site and that is great.

    It is great that people can have debates over their different views on things such as real estate and the economy.

    The hard part for me is when someone offers a prespective that is different then others on this site people are quick to get into a naming calling match.

    I have read posts over and over again where someone gives their opinion just to have about 5 other people come out and say some unneeded comments.

    Just for that reason I have not been on this site as much.

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  81. 81
    [troll] says:

    Ths clcltr s jst n mr xmpl f wht th st prvds. Wrts nd ll, t prvds SM tlty fr ppl tryng t gt grsp f th crrnt sttn.
    …………..

    Th clcltr s flwd by th smpl fct tht th rt f pprctn s FXD t Tm’s wsh/hp f 5%.

    f th rt f pprctn wr sr djstbl t wld b “Fr nd Blncd”.

    s t stnds t s n prsns pnn nd nt fct.

    RL< hrf="#" clss="rplyt" nclck="rplyt('53807','∓#91;trll∓#93;','81'); rtrn fls;">Rply – < hrf="#" clss="qt" nclck="qt('53807','∓#91;trll∓#93;','Ths clcltr s jst n mr xmpl f wht th st prvds. Wrts nd ll, t prvds SM tlty fr ppl tryng t gt grsp f th crrnt sttn. \r\n..............\r\n\r\nTh clcltr s flwd by th smpl fct tht th rt f pprctn s FXD t Tm\'s wsh\/hp f 5%.\r\n\r\nf th rt f pprctn wr sr djstbl t wld b \&qt;Fr nd Blncd\&qt;.\r\n\r\ns t stnds t s n prsns pnn nd nt fct.\r\n\r\nRL','81'); rtrn fls;">Qt

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  82. 82

    Being Patient-

    Nothing is perfect my friend. Its called a blog and by nature consists of 95% garbage. Some opinions are solid. Others are idiotic. Either way, its not a reason to boycott the site. Tim does a great job with the general articles. If the blog bothers you, DON’T READ IT!

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  83. 83
    David McManus says:

    I wonder if he even actually understands that he has been blocked since I still see his comments popping up in the sidebar.

    Rate this comment: Thumb up 0

  84. 84
    being patient says:

    Captain Kirkland,

    This is an example of what I was speaking about.

    Rate this comment: Thumb up 0

  85. 85
    Garth says:

    I think you have done a good job with the moderation so far tim. The swear filter makes me laugh, and anarchy is no good when running a business.

    My only moderation request would be a yelling / length filter on posts by the softwareengineer. Nothing tim can do about this, but every time I click on his blog (I know I like train wrecks sometimes) I can’t help but feel sorry for the children and teachers who are subjected to those essays.

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  86. 86
    crispy&cole says:

    Tim does a great job here!

    Rate this comment: Thumb up 0

  87. 87
    crispy&cole says:

    Hopefully you dont need to moderate the way Ben does…it makes for a slow blog.

    Keep up the good work.

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  88. 88
    N. Criss says:

    The Tim,
    FYI: I am seeing the same truncating problem mentioned by the other guy. I am using FireFox 2. “$175,000″ gets truncated to “$175,00″ and then the result is: “$25,855″

    Rate this comment: Thumb up 0

  89. 89
    The Tim says:

    I think I have fixed the Firefox 2 problems. Let me know if any of you still have issues.

    Thanks!

    Rate this comment: Thumb up 0

  90. 90

    […] Bubble. It seems that in the course of a morning, The Tim put together a quick and dirty little estimator on what your home’s currently worth. Not bad for a Tuesday morning. According to The Tim, […]

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  91. 91
    Harley Lever says:

    What Goes Up Must Come Down,

    I was simply defending RALs right to comment. My point was that there are lots of offensive people here in this blog that immediately bring things to the gutter. I am sorry to inform you that you have proven to be one of those people with many of your past posts.

    You still not have answered my previous questions about your degrees and what you “job title” is? This cannot be so one-sided.

    With regard to prices, my short answer is there is a lot of downward pressure right now and prices will likely fall, with a lot of possible upward pressure in the future. Much of which hinges on the election.

    Ending the Iraq war is key. This war puts a premium on oil prices which has proven to drive all of our costs up. Bush leaving office will also have an effect on Oil prices… there seems to be an oil premium associated with his existence. Americans have already begun changing their demand and hopefully will continue. Although if you look back to the 70’s it is hard not to think Amnesia will set in.

    We are in the middle of a commodities bubble as well. We are starting to see indicators of that bubble deflating. Oil prices are dropping and if they continue, it will put more disposable income in the hands of Americans who so desperately need it. It will also reduce the costs of everything else from the fertilizers that produce our food, to the plastics for packaging it, to the cost of shipping.

    Our new presidents energy policy (if there ever is one that gets put in place) will be another key factor. If we fund renewable, especially solar, we have an opportunity to put many electricians, plumbers, and carpenters back to work. This would do a lot for those who are out of work because of the home building industry. I think we should take the 15 Billion in tax incentives from Big Oil and give it to solar and green energy projects. The biggest reason for this is the end game. We will greatly limit our dependence on any anti-American regime, which in turn reduces our long-term exposure to war and other costly conflicts.

    As the largest consumers in the world we are a major cog in the engine that drives the world economy. If we stop spending and stop consuming, the rest of the world feels it and is effected. Look to the current global economic downturn and this starts to become apparent. The world does have some incentive to make sure the United States, at least for now, becomes more stable, their livelihoods depend on it too. Our weak dollar does make American prices more competitive, especially that of Boeing. We can further strengthen the US by providing pro-business incentives to companies who invest in the United States and employ American workers. Much like we do with the auto industry. That is why Toyota and Nissan have plants here.

    We also have many baby boomers (78 Million) coming up for retirement. I think this might have some benefit of easing the effects of jobs lost… how many were getting ready to retire anyway. In addition, we are just seeing the beginning of a huge boom in health care jobs. Someone needs to take care of those aging boomers.

    Lastly, never discount innovation and technology. The speed at which we can create, adapt, and recover in unprecedented in the generations before us. The United States has some of best schools in the world which are the epicenters of technology innovation and drive business creation and job creation.

    Will housing prices fall more? Yes. Will they be in the gutter for ever, absolutely not. Will my condo be worth less in three years, maybe, but why does that matter? I plan on renting this home when I am done living in it. If in three years the housing prices crash, that just means I can buy a lot more house for a lot less.

    Many here cheer the economic downturn because you think prices of housing will drop. I just want to know why you think you are immune to job loss and other effects of a devastated economy? If jobs vanish and you are forced to work for less pay that does not make you any more closer to home ownership even if prices do drop. Be careful what you wish for!

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  92. 92
    mikal says:

    Harley, you are dead on. Good one.

    Rate this comment: Thumb up 0

  93. 93
    WestSideBilly says:

    Tim, the truncation errors are gone for me.

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  94. 94
    aldreth says:

    “5% per year is a reasonable rate of appreciation.”

    —Historically housing appreciates with inflation. Gains are almost non-existant dating back to 1890.

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  95. 95
    dh says:

    calculator is functioning properly at all… your calc returned $309K for below

    2004 purchase at $270K

    $270K x 1.05 = $284K (+1yr appreciation = 2005)
    $284K x 1.05 = $298K (+2yr appreciation = 2006)
    $298K x 1.05 = $313K (+3yr appreciation = 2007)
    $313K x 1.05 = $328K (+4yr appreciation = 2008)

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  96. 96
    dh says:

    sorry…. IS NOT functioning

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  97. 97
    The Tim says:

    dh, you missed calculator assumption #2:

    In 2001-2008 homes were 2%-30% overpriced.

    So it doesn’t just add 5% each year to the 2004 purchase price. It factors in how overpriced homes in the Seattle area were in 2004 before adding the 5% per year.

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  98. 98
    Tony1790 says:

    My house that I bought in 1999 for $131,000 sold for $292,000 in 2006, the calculator says it’s worth $209,000. That’s pretty close, as new homes are selling for low 200k’s (Kitsap county). Zillow says my old house is $267,000, so it’s looking like a loss for the new owners.

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  99. 99
    What goes up must come down says:

    HL,

    To speak to your points,
    1. Which “Many Posts” are you talking about — or you have “Proven” nothing.

    2. I am a structural engineer, MSME

    3. Downward price pressure? NO doubt, isn’t that what this blog is all about discussing “WHY” this is occurring. For instance as many, many people have pointed out no doc loans, no job verification, etc.. — the overly easy credit environment — maybe that is one reason Freddie Mac had a lose 3x greater than people assumed it would be.

    4. If the IRAQ war is the key to solving the housing problem than I think you have a complete new theory going. I guess it wasn’t the easy credit but the war.

    5. High Oil no doubt creates inflation but oil prices can change drastically access to credit won’t, lenders will be writing off losses for many more quarters.

    6. If you believe that commodities are bubbling along than I guess you can understand that home prices are also and just as you state for commodities housing will come down in price because it went so far off the historical trend.

    7. Green energy policy — I hope it happens but I wouldn’t bet on it — Exxon, Shell, etc… have strong lobbies.

    8. It is the stated goal of our Treasury dept. not to have a weak dollar. If the dollar is too weak for too long you may just end up damaging the economy more than helping it, for instance if the Chinese who hold a significant amount of our debt start dumping green backs.

    9. Nissan just cut some heads in the U.S.

    10. How many of those boomers can retire if their main asset — housing is in the toilet?

    11. No doubt we do have some of the best schools in the world — that is why most of the grad students today are from foreign countries — Ouch.

    12. “Will housing prices fall more? Yes. Will they be in the gutter for ever, absolutely not. Will my condo be worth less in three years, maybe, but why does that matter? I plan on renting this home when I am done living in it. If in three years the housing prices crash, that just means I can buy a lot more house for a lot less” — SEE that is the whole point of the discussion — why would I buy today if as you agree prices WILL fall, why not wait one, two, or three years until housing is closer to the historical trend line — WASN’T that the whole point of the CALCULATOR????

    13. Do I think I am immune to a job loss — certainly not — in fact that is why I am very careful when it comes to making purchases, I like looking at DATA, not gut feel etc… If one may lose a job doesn’t it make more sense to ensure you don’t lose the job and than have a house you can’t pay the mortgage on that is worth less today than the day you bought it???

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  100. 100
    Harley Lever says:

    What Goes Up Must Come Down,

    1. Downward Pressure for how long? Our Inventory is beginning to show signs of flattening out. We have low interest rates. An $8500 tax incentive for first time buyers. Lastly, real estate is local, there are deals in any market.

    2. Ending the Iraq War stops the government from bleeding massive amounts of money and provides for a better looking balance sheet. A fraction of what we are spending on the war can then be used to stimulate jobs, repair infrastructure, and other programs that will put Americans to work while making our roadways safer. It will stop the upward pressure on oil, providing relief to all American families across everything they purchase.

    3. Access to credit is still easy for people with good verifiable income. You need to put 3.5% down… not that painful!!!

    4. Again real estate is local. Do I think Seattle, the city will come down as much as Marysville? Absolutely not. Can you find a house at a bargain rate that will increase in value or have instant equity, sure you can.

    5. Yes, Shell and Exxon have huge lobbies, but just about every American and politician is sick of their crap. Politicians have more pressure than they ever have had to develop a Green Energy Policy. Solar will put tens of thousands of contractors, plumbers, and electricians back to work.

    6. The Dollar is showing more strength and there are predictions that it will increase by 15% against the Euro and the Yen in the next 9 months. Remember, we are the largest consumers in the world, if we slow down the entire world has a whole lot of sales it has to make up for. Another good sign is that gold is down to $890 form $1000.

    7. Yes, Nissan cut jobs, but how many are still here.. My point was offer more companies incentives to build plants and hire American workers.

    8. 78 million people will be retiring in the next 20 years many (in numbers, not percentage) of which are high paying executive jobs. Look around Boeing, how many grey-haired upper managers are walking around? We are going to have a hard time filling jobs in the US and the only way we will be able to meet those demands is through immigration which will increase our population and demand for housing. http://www.bls.gov/opub/mlr/2000/07/art2full.pdf .

    9. Most boomer do not retire and immediately drain their house for money. Yes, you can have a reverse mortgage, but that is generally used for end of life scenarios. 401k, Pensions, savings, and social security support their needs long before it becomes necessary to tap the house.

    10. “that is why most of the grad students today are from foreign countries — Ouch.” YOU ARE FLAT WRONG! Foreign born students make up about 15% of students enrolled in grad school. http://www.insidehighered.com/news/2006/11/01/foreigngrads

    11. We will need top talent form foreign born students at grad schools to fill the jobs of the 78 million retirees. We will need to change our immigration policies to allow for this to happen and we will need a lot more houses. You are just seeing the beginning of what needs to be a huge population growth to meet the job demands.

    12. I never said how much I thought the housing market will fall. In Washington we have foreclosure rate of 1 in 400. While Stockton has a rate of 1 in 25. Quite a big difference. Right now you have low interest rates, an $8500 tax credit to buy a house, higher limits for what was traditionally a jumbo loan before, and most importantly many sellers willing to make a deal. Leverage all of the above and you could be extremely happy in a few years.

    13. Buy a house you can afford in good times or bad. If you live from pay check to pay check as a renter or an home owner, you will be homeless if you have no income either way.

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  101. 101
    Greg K says:

    This seems very wrong. If I plug in $500k house bought in 2008, it’s already gone down to $400K?

    Check your math.

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  102. 102
    Fremontian says:

    Based on actual, recent (summer) sold prices of very close comps in my neighborhood, I’ve actually gained about 4%, and I bought in 2006.

    This is in the Fremont neighborhood. Are priced holding up better in the city?

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  103. 103

    Fremontian,
    Not in the entire city, but yes in Fremont, and Wallingford, Phinney, Greenlake, parts of Ballard, and a few others. Southeast Seattle has not fared nearly as well.

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  104. 104
    Alan says:

    IRA,

    I was following this house on redfin and it got relisted with a reset days on market. What does your direct MLS history show for days on market and asking price changes?

    17705 NE 156th St
    Woodinville, WA 98072

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  105. 105

    Alan,
    First listed 4/30/08, went inactive 7/18/08, new listing 7/29/08 all with the same asking price.

    Rate this comment: Thumb up 0

  106. 106
    Alan says:

    But different square feet…

    Rate this comment: Thumb up 0

  107. 107
    GCH says:

    Hi Tim,

    Sorry, but I’m seeing an algorithm problem, too (see Greg K’s post). I entered “395000” and 2005 and got $393243. Unlikely that price dropped based on your assumptions. I’m on MacOSX.4 and Firefox 2.0.0.16. Tried and got same result in Safari. I’m sure you enjoyed programming this, but I bet you hate us pesky software testers by now! Hope this helps, and best wishes for the next release.

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  108. 108

    […] to my (admittedly rough) calculations, they’re still about $50k overpriced. Good luck to them, but the real incentive for buyers in […]

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  109. 109
    NoMoreWork says:

    Hey Tim,
    Someone linked to this on the RedFin blogs and I remembered seeing it last year. Any chance we can update it to present day? Just so it better reflects prices based on the market falling further since this post… Wouldn’t want people basing their offers on an outdated calculator and paying too much for that North Seattle 3bd 1ba $700k Craftsman ;) hahaha

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