Tag Archives: Home Values

What Do You Want to Hear?

HearWe are continuing our quest for the Holy Grail of HomeValuation this week.  To catch up on the discussion (or to access a more legible font-size for your aging eyes)  google Tom Brezsny’s Real Estate of Mind.

Is there anything in real estate more important than the concept of  Home Value?  Or anything more misunderstood, misinterpreted, hotly debated, criticized, argued about and wrestled over to the point of exhaustion?

Home Value is more like an unending question than a finite answer.  It’s more like what that other hand does while the first hand is busy clapping.  It’s more like a whisper floating inside all that white noise blowing in the wind.

Real estate’s mantra-of-a-thousand-faces is repeated daily in myriad ways.  What’s my home worth? What’s this home worth that just came on the market? What’s this home worth that I just made an offer on? What will my home be worth next year?

We humans are always trying to lock it in. Pin it down. Fix it in time once and for all. For ever and ever till death do us part.  Or until it changes in our favor…

Is it possible to put an exact number on value? Quantify or monetize it?  Or is value just a brief snapshot of judgment. A moving target that exists solely in the eye of the beholder.  Or a whole lot of beholders in the form of a marketplace that issues collective judgment through the simultaneous action/inaction of all its constituents.

Every single perception of value is different. Because every person’s life and the sum total of who they are is unique.  People and the markets they comprise are biological organisms rather than automated, cause and effect, closed-end, machine-like systems. They are dynamic, constantly changing and unpredictably emergent by nature.

So how do you grapple with the question “What’s my home worth?” !!!

Where do you start?  How do you choose? Who do you believe?  What’s considered best practice?  Are you looking for the easiest way?  The cheapest?  The least painful?

Get a Zillow Zestimate?  Pay for an appraisal? Go through the hassle of interviewing three Realtors (as my dog-eared copy of Real Estate of Dummies still says you should do?)  In the end do you opt for whatever method tells you exactly whatever you wanted to hear in the first place?

Without question getting a Zillow Zestimate is the fastest, cheapest and easiest m.o.  Just log on. Type in your address and hit return.  There it is.  Prest-o chang-o.

When I say Zillow I’m including all the other third party data aggregators out there that have created sophisticated algorithms to compile data from the public domain and interpret it for us in formulaic fashion.

There are dozens of similar sites. More coming online daily as the best minds of Generation Y devote themselves to devising new, clever and clever-er ways to sell advertising by getting people to click on things.

Colleges use Zillow Zestimates to help assess the viability of scholarship applicants and their families.  Divorce attorneys use them in cases where they are helpful in inflating or deflating overall asset value held in marriage.  I don’t think they are considered legal yet for Estate Attorneys trying to establish home basis at the time of a principal’s death.  But that’s probably coming.

Lots of people love to log onto Zillow to amuse themselves – specially when their Zestimate indicates their home just jumped $30k in value the past month and they can visualize their equity as a gold bullion bar locked in a safety deposit box that just got magically bigger.

But is a Zillow Zestimate the thing that you want to base your list price on?  It’s ok in the abstract but what about when the rubber actually has to meet the road. The sign goes up and live humans are about to issue their judgment about what you are offering for what you are asking?

Continued next week…

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Hearts and Minds

HeartsandMindsThis week we continue our search for the Holy Grail of Home Valuation.   Why?  Because everyone wonders what their home is worth.  Now or in the future.  It’s always the biggest question.  And wonder can quickly become hardcore worry when people are facing significant change –  like buying or selling their home.

Nothing odd about that.  Home is the biggest asset most of us will ever own.  And home is also the hallowed bastion of refuge, privacy, comfort and security that nourishes our lives.  It’s both a real place and a symbolic place of centering for people.  Of course we worry about it!!

When home and the concept of it are in a state of flux, people tend to gravitate toward anything that offers them a heightened sense of certainty.  They want as much of it as they can get their hands on or wrap their minds around.

Certainty helps people anchor their hopes. Quantify their fears. Quell those nagging what-ifs.  Without a little certainty, selling a home feels like a high-wire circus act. Walking a slippery slope without a net sheet below. Balanced on the precipice of that yawning chasm known as the unknown.

But is there really such a thing as a little bit of certainty?  Is it possible to be 20% or even 50% certain?  If you aren’t totally certain then you aren’t really certain right?  Anything less than 100%  certain and it’s all just another guestimate (or quantum probability)  – whether it’s offered up through the medium of experienced analysis, intuitive insight,  algorithmic aggregation of detail,  some ritual form of reading the tea leaves or anything else.

Enter Zillow.  The trending poster-child of certainty in the increasingly crowded suburban strip-mall of Home Valuation.  The recently anointed oracle of truth and big data sooth-saying.  By far the flashiest new player on the national real estate scene – as witnessed by the company’s recent media coup – scoring a town hall-style interview with President Obama on housing policy.

Real Realtors were conspicuously absent for the yahoo’d and much ballyhoo’d Zillow web event.  They were busy sulking about their White House snub. Nursing their wounds back in the stately, cigar-filled. mahogany-paneled boardroom of the NAR (National Association of Realtors) which I’m convinced must share the same bunker/headquarters with the NRA (you all know this smoking gun).

They tried to do damage control.  Issuing media releases pooh-poohing  Zillow as an upstart “real estate entertainment site”  while frantically consulting their own programmers about upping Realtor.com’s profile to earn the same kind of street cred that competitors like Trulia and Redfin (& Zillow) have garnered with the general public.

There’s a huge shift that’s happened/happening and traditional Real Estate’s branding is way behind the curve.  I’m not sure how many hearts and minds Status Quo Real Estate ever really won, since Real Estate Agents are often considered just a little higher up the food chain than their poorer second-cousins that hawk used cars for a living.

However many hearts and minds we had in our corner in the past… that number is shrinking.  People don’t trust us as much as they should or could.  The profession and the industry from individual Realtors all the way up to the Regional MLS to the CAR and NAR should own up to it.  And change.

Bottom line?  The average person sees traditional Real Estate as always trying to sell them something. Industry information geared towards control and “making more sales.”

Zillow on the other hand is perceived as being accurate and free. Direct data and non-partisan information not filtered through salespeople wanting a piece of the action.

Nothing could be further from the truth.  As a wise-person said:  “Anytime you are on a site and think the content is free,  you are the content.”  So the other bottom line:  If you are on Zillow you are getting sold.  Literally and figuratively.

To be continued next week.

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Home Valuation: Holy Grails and Sacred Cows

HolyGrail051Welcome to another installment of Real Estate of Mind folks. Tryin’ to keep it as real as possible here.  I know…Real Estate is already supposed to be the Real Thing. Real Property. Solid Ground. Stable Brick and Mortar.  But sometimes it feels more like a drug-induced altered estate of mind when you are inside it.  Anything but the immovable terra firma it’s cracked up to be.

Trying to make sense out of real estate isn’t easy when so many conflicting ideas are competing for chunks of our brain space at the same time. A task made even more difficult by brains that weren’t really designed to distinguish between interesting facts and creative fiction in the first place.

Human beings are elaborate story-telling machines. Serial random-story generators. In the beginning, God hard-wired us with circuits full of neurons and synapses imprinted on a sea of glia.  In the end, he downloaded algorithms and told us to go forth and multiply our stories.  And after that? He rested and said:  “When in doubt…pray.”

That’s our immutable nature and ongoing nurture. Toss any of us a few crumbs of information and we’ll happily, unconsciously construct a plausible narrative in a New York nano-second. Any day. Any way.

Give us lots more data to organize, infintessimalize and wig out on and we may eventually reach a tipping point. Brain lock down on some compelling storyline that becomes completely intractable. Ready to go to war to protect the hallowed turf of our ideas and constellated belief systems.

Real Estate of Mind isn’t here to tell you what to think. Just to encourage you to think.  Perhaps offer a few simple perspectives to stick under your thinking caps while quietly cogitating.  Meanwhile don’t forget to question authority.  Subvert any paradigm anyone tries to sell you. Even if it doesn’t seem like they are selling you. Even me.

Today? We’re beginning our several installment search for the Holy Grail of Home Value.  Where does it come from?  How do we find it?  We’re going to start by taking a quick survey from A to Z. In 500 words or less.

A is for the Appraisal that comes after a buyer and seller decide on price.

B is for last night’s Barbeque where people were talking about how hot the market is.

C is for Chinese investors purported to be plowing all cash-offers into SF luxury properties.

D is for Real Estate for Dummies that still recommends  3 different CMAs from 3 different agents.

E is for Everyone that gives you advice when you buy and sell – whether you want it or not.

F is for the Fear of paying too much or leaving something on the table.

G is for all the Guesses you make – educated and otherwise.

H is for the real estate Headlines you’ll read between now and whenever.

I is for the Interest Rates people get fixed into and fixated on.

J is for all the ways people Justify their decisions.

K is for Knowing what you can’t Know.

L is for the canned Listing Presentation(s) you are going to hear.

M is for Median Price figures that don’t always add up to much.

N  is for the evolving New Normal that doesn’t feel very normal.

O is for that One Perfect Buyer that might be out there.

P  is for Peak of the Market Prices that become the yardstick.

Q is for Quality of Life considerations that should fit in somewhere.

R is for the Remorse  everyone feels both before and after.

S  is for Search Engines that make TMI more possible.

is for the Truth the market eventually reveals.

U is for Urban Myths that still exist – like real estate as a seasonal phenomenon.

V is for all things Virtual that make it seem so real.

W is for the Wiggle room you think you need.

X is for X-factors of fate, blind luck and divine intervention that help decide the outcome.

Y is for You.  Your money.  Your house. Your decision.

Z is for Zillow the recently anointed oracle of all things real estate.

More Next Week:  The rising phenomena of Zillow Zestimates  and what it all means.

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