Not all homes falling in value, Zillow.com says
Zillow broke housing into five groups based on value. In our metro area, the bottom was $137,999 or less; the lower middle was $138,000 to $232,999; the middle was $233,000 to $297,499; the upper middle was $298,000 to $388,999; and the top was $389,000 and up.
This was a new analysis of Zillow's Home Value Reports for the fourth quarter, which were released last month.
The results don't suggest it's all good news for owners of less expensive homes and bad news for owners of pricier ones.
People in the lower-middle category who bought last year "had the least owner equity ... and nearly 40% actually have negative equity," Zillow says. The typical person who bought a home in the most expensive category last year has a 21 percent equity stake -- "fueled by the fact that those in the Top quintile had a median down payment of 20%, while those in the Lower Middle quintile put less than 1% down," Zillow says.
Zillow's Zestimates have drawn criticism for inaccuracy. Zillow's vice president for data and analytics, Stan Humphries, blogged about the data earlier in the month:
The Zillow Home Value Index takes a different approach to constructing its market index. We generate valuations several times a week on more than 67 million homes, or roughly three out of four homes in the U.S., and calculate historical values dating back to 1997 (thus creating over 13 billion Zestimates). This complicated process allows us to aggregate these house-level valuations into indexes (what we call the Zindex) at the neighborhood, ZIP code, city, county, metro area, and national levels. This Zindex eliminates the bias present in median sale prices by looking at the value of all homes in a region, not just those homes that sold. ...
An important property of the Zillow Zestimate that allows us to aggregate them into a very accurate and reliable Zindex is that they have relatively little systematic error meaning that, while each Zestimate has some margin of error, they are just as likely to be above the actual sale price of a home as below. This means that individual estimates, each with some error, can be aggregated to form a quite accurate measure of all homes.