Sunday, August 10, 2008

"Out of Sync With Reality" - Zillow; "How To Bargain" - Redfin

Zillow.com is a site dedicated to giving consumers the tools and information that used to be available only to RE Agents. Each Quarter, Zillow surveys consumer confidence in the Real Estate Market.

In its Second Quarter survey, 62% of respondents say their house has appreciated.

According to Zillow, this "high level of optimism is out of sync with reality. The company’s research shows that
77% of U.S. homes depreciated in value over the past year."

5% of house values stayed the same, and 19% increased (most sellers in C'ville/Albemarle seem to believe their house is in that fortunate 19%--protected market, you know).


Read more at the Developments blog on the WSJ.

Meanwhile, Redfin is the industry's first online brokerage for residential real estate. They focus on the major metropolitan markets of Seattle, San Francisco, Southern California, Chicago, Boston, and Washington, DC area. Their claim is that they save buyers and sellers thousands of dollars in costs, including agent/broker feels. On Friday, they were all over the Television Universe.

To bring delusional homesellers to their senses, Redfin came up with what they call "Seven Tactics for Real Estate Bargaining," (in pdf form) which are recapped here:

1. Focus on Listings Unsold After 90+ Days: Heavily discounted homes are
83% more likely to have been on the market for 90+ days.

2. Focus on Fixer-Uppers: Heavily discounted homes are 73% more likely to
be marketed as fixer-uppers.

3. Back Off On Remodels: Heavily discounted homes are 20% less likely to
feature a noteworthy remodel.

4. Don't Be Put Off by a Price Reduction: Heavily discounted homes are 28%
more likely to have already been price-reduced.

5. Look for Homes Owned a Long Time: Heavily discounted homes are 52%
more likely to have been seller-owned for 20 years or more.

6. But Don't Be Put Off By Flips Either: Heavily discounted homes are 9%
more likely to have been seller-owned for less than five years, a slight but
surprising correlation.

7. Don’t Expect Banks to Negotiate Much: Heavily discounted homes are
only 9% more likely to be a short sale or bank-owned. Most consumers
expect this correlation to be much stronger.

Go for the seller who really wants to unload their property. Sure, some of these tactics have appeared on Real C'ville - The Bubble Blog, and on the CAARBlog, as well as earlier in major newspapers (NYTimes, WSJ). But if you go to the Redfin blog, they have the "science"--numbers to back up their claims and some more info. They also have video links to their appearances on major Morning Television this past Friday (08/08/08).

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