Mid-Week Open Thread (2012-08-01)

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Here is your open thread for the mid-week on August 1st, 2012. You may post random links and off-topic discussions here. Also, if you have an idea or a topic you’d like to see covered in an article, please make it known.

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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. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.

7 comments:

  1. 1
  2. 2
    ChrisM says:

    bank refuses to take property (in good old Cleveland) after foreclosing:
    http://blog.cleveland.com/metro/2009/07/bank_walkaways_from_foreclosed.html

    “Lenders or mortgage companies decide they don’t want homes they have already foreclosed on, sometimes because the value has plummeted or they believe the homes could become costly liabilities if they are socked with housing code violations.”

    Further discussed here:
    http://www.nakedcapitalism.com/2012/08/another-way-banks-abuse-homeowners-and-distort-markets-refusing-to-take-title-to-foreclosed-properties.html

    Last week I was playing around w/ Redfin looking at old foreclosures. If I ever get some time, there’s some houses in Vancouver WA that were foreclosed 2+ years ago but never went to the market. I’m curious if the houses are occupied…

  3. 3

    RE: ChrisM @ 2 – Meth lab houses would probably fit that group.

  4. 4
    ChrisM says:

    RE: Kary L. Krismer @ 3 – Yep. Seems like there must be a way to allow municipalities to bulldoze a property and bill the owner.

    Also points to a problem of failure in underwriting, or a bad assumption about a property being worth anything 10+ years after the appraiser visits it. I’m sure banks view it as a cost of business that averages out, but it really sucks for the neighborhood…

  5. 5
    yukondave says:

    Its here, Yahoo and Zillow have spoken? I really liked the rent vs own spreadsheet you built but it seems according to people that make money selling homes that your assumptions are not right. Here is what they are saying:

    “Is it better to buy a home or rent? An analysis released today by real estate information provider Zillow.com finds that in most of the U.S., buying becomes a better deal than renting after only three years of residence.
    In many metro areas, the advantage comes much sooner. In Miami, Fort Lauderdale, and Tampa, for example, owning beats renting after 1.6 years, the study finds. Zillow determined the breakeven horizon—the point at which owning becomes more financially advantageous than renting the same home–for more than 200 metro areas and 7,500 cities around the U.S.”

  6. 6

    RE: yukondave @ 5
    It astounds me that Zillow has as much credibility as it has. During the height of the bubble, when people were “Zillowing” their homes as a parlor game to see how much it was worth, it was telling me that I could have sold my home for a good 20% more than I actually could have, and now it’s telling me that I can sell it for 55% less than that, or about 50,000 less than I could sell it for. Zillow is notoriously inaccurate. It’s fun and all, but two things come to mind:
    1. They can’t even say ” We guarantee accuracy to within 50%”, and,
    2. ZIllow makes more money from a real estate market in which lots of people are selling and buying houses, not renting. No vested interest there, eh?

  7. 7
    Tim McB says:

    RE: Ira Sacharoff @ 6

    I’d agree with the first comment but of course nothing’s a guarantee you actually sell it for a specific amount. Even a detailed appraisal is simply an estimate, though with alot more data, details, comps etc. on the property. Its totally just a rationalization of value after the fact of a price has been agreed to. Tax assessments rates are just as bad if not worse in my opinion.
    As to the second point again I’d half agree half disagree. Yes, their main monetary supply is from the RE market but they also do zestimates for rentals and post rentals online as well so its not solely about selling RE. Secondly, their reputation is only as good as the service they provide to both prospective buyers and sellers so they have a vested interest in being as accurate as they can be. They usually give a range of accuracy per market. I believe Seattle is within 7.1% if the data is correct. That’s not terrible. That said its pretty darn easy to manipulate the data to give a false reading on so it should be taken with a grain of salt. However, its a good place to start. For our house when we were considering buying it I tried to triagulate the value based on the somewhat faulty tools I just mentioned above (tax assessment, zestimate, comps, and later appraisal). Appraisals in my opinion are just a rubber stamp by the bank (via a third party) just to make sure the deal looks legit. I hardly ever hear of a deal fall through because the appraisal came up short.

    PS I don’t work for zillow.

    PPS I love it when homes on redfin request for their zestimates not to be shown, as if its that hard to look it up yourself. Usually those are the one’s whose pricing is out of touch with reality.

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