Baltimore home values down to '05 levels, Zillow says
Home values in the Baltimore metro area dropped 10 percent last fall to levels last seen in early 2005, according to a newly released report from real estate information site Zillow.
Zillow is relying on its "Zestimates" of home values, which means these are estimates of the value of all homes, not just the recently sold. The company says U.S. home values dropped a bit more than ours -- 11.6 percent.
The more expensive the home, the bigger the drop, according to Zillow: The Baltimore area's "bottom tier" (around $150,000) lost about 6 percent in value, while the top tier dropped 13 percent.
By the numbers, according to Zillow:
--Nearly nine in 10 Baltimore-area homes lost value in the past 12 months
--About 14 percent of metro-area homeowners with mortgages owe more on those mortgages than their homes are worth
--About 8 percent of sales in '08 were foreclosure properties
--Grand total of local home value lost last year: $27 billion
On the up side, Zillow estimates that 96 percent of metro-area homes were worth more at the end of '08 than they were at the start of 2004. (The Baltimore area saw a big jump in values in '04.)
There's a significant margin of error in Zillow's individual Zestimates -- 10 percent plus or minus in the Baltimore area, according to the company. But it believes they're a very accurate measure when compiled together like this for overall statistics.
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Comments
My Zestimate shot up for some reason in the second half of '08. It dropped $10k in January, but $230k is still way higher than the sales I see going on around me in Pigtown.
my Zestimate chart
Posted by: Carson | February 3, 2009 10:10 AM
Once upon a time... the annual increase in the value of existing homes was ALWAYS a very modest amount (approximately equal to the effects of inflation and maintenance) of +/- 3% per year.
A property that sold in 1996 for $100,000 would (should?) have increased to about $127,000 in 2004 and be about $147,000 today.
This is the simple math aspect of the analysis and of course there are a thousand other factors that can affect each individual property, and the market as a whole, but it does serve as a (er, uhm) rational baseline for comparison.
Do that. Compare. Compare the irrational increases in "values" that actually occurred during this period and run the numbers backward until you get to a level that makes sense to you.
I did this with a property I sold in October of 2006 (at the height of the insanity) for 28% more than this "normal" method should have yielded. Two years later that same property now has an (SDAT) assessed value that is about where the sale price should be.
Comparable properties for sale today in that same neighborhood are (MLS) listed at (13-20%) higher prices than what I sold for in 2006.
But the ones actually being sold there are the foreclosures listed at almost 30% less than my 2006 sale price; which may still be too high depending on condition.
Posted by: MrRational | February 3, 2009 10:55 AM
1998 values need to occur for a recovery to take place. And the fools who drank the kool-aid need to lose their shirts.
Posted by: Darwin Rules | February 3, 2009 11:23 AM
I think Zillow is just a random-number generator. :)
There was an interesting article in the USA Today about a month (or more?) ago that the home prices will never be as high anymore and we will just return to the pre-bubble situation of modest returns.
I personally think it was wrong to view your only place of residence as an "investment" in the first place. To me being a homeowner is pretty much like renting, but from a bank. The only difference is that I'm responsible for maintenance, but also can decorate any way I want.
The bubble is the bubble: when it bursts - it's gone. The sooner we realize this the better.
Posted by: Jelena | February 3, 2009 2:34 PM
Thanks for sharing all the stuff. It is just plan incredible.
Posted by: St. Louis Commercial Buildings | February 3, 2009 2:44 PM
My house value flucuates daily according to Zillow. Sometimes it as low as $300k, a week later it will say $400k+. What are your thoughts on this?
Posted by: Dunn | February 4, 2009 1:56 PM