Charlotte MSA prices Up.

Update- Zillow announced yesterday that Charlotte MSA prices were up
9% over last year, 3rd best in the nation… which would be great if
true, however my research, easily done with our MLS, indicates
otherwise.
Zillow responded in another forum to my question on how these numbers were created:
Hi, it’s David from Zillow;Terry
-
Zillow is a database of all homes not just those that are currently on
the market and so we calculate Zestimate values for all of the homes in
our database. With this database we can report the value trends of all
homes not just those that recently sold. The beauty of this approach is
that it is not skewed by a change in the mix of homes that are selling
- a common problem for the traditional approach of reporting value
trends using only an analysis of recent sales
I think I understand that David, but I have two questions:
Your national and local MSA numbers are then the addition of all of
your Zestimates, which were created from the extrapolations from actual
comparable property sales, correct? Essentially additions of estimates
based on comparable sales, right? Then if I took ALL the sales over a
longer period of time, and compared them to the same time and place
last year, our numbers should be similar shouldn’t they? Well they
aren’t, they are way off.
Your President has stated
that as much as 38% of your Zestimates are more than 10% off, why isn’t
your margin of error compounded in a fast moving market where prices
could be going up or down relatively quickly. I’m not a statistician,
but it seems that margin of error must go up in these conditons.
While our numbers and yours do correspond in some regards- for example
our more expensive homes have taken the hardest hit- your data
indicated the medium to large home have taken a harder hit, a pretty
similar picture, there is still a huge variance in our actual results
from the MLS which while not 100% complete is a good representative
sample of non-builder sales.
I’ve recently done research on two of the top three leading zips, with
appreciation based on average square foot prices from the MLS, reports
showing them for the 3 month period ending July 31. In one zip code,
there was price appreciation 50% below yours, and in the other? Double
digit depreciation! The zip codes in question, 28277 appreciated 4.5%,
and 28278 depreciated 11.97%–over May, June and July- quite a
difference to Zillow’s +9%, the actual reports are below for your
review.
Why is this important? Because I am sure one of our local papers will
pick up the Zillow press release and report it, probably uncritically,
and I’ll have to face a seller next week who thinks his property has
gone up 9% when it might have fallen 10% from last year.
David, I’d like to be able to use your numbers–really I would if I had
a sense they were atleast roughly accurate. They are impressive by
their sheer volume and I know that a lot of big-time crunching has been
done, but I just can’t not explain the difference between our methods
or why your addition of estimates would be a better measure of my
market than the actual data, as long as there are sufficient
transactions to be meaningful statistically. Here are my zip code
Market Reports
Market Report 28277- July 2007
Market Report 28278- July 2007Don’t
get me wrong, I know Charlotte has fared much much better than most of
the country, but the headlines need to be right. Your comments are
appreciated. terry
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