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2/23/2011 How Accurate Are Zillow Estimates (so called Zestimates)

Zillow uses statistical data (zip code, square footage, bedrooms, baths etc) to make their calculations. Some counties provide all the data that they could hope for, but others are lacking such key things. The more data they have, the more accurate the Zestimate. In some areas, they might not be able to produce a Zestimate at all (like in Middlesex&Mercer counties indicated below). If the home facts are incorrect, affects the value. Also, they've never been to the house, never seen the owner's expertise with colors and landscaping. The number of transactions in a geographic area affects the prevailing market values. The fewer the transactions, the lesser the data and the less accurate the estimate will be. Also, they use public data for house attributes, and some areas report less or no data than others.

Zillow has no way of knowing if the property has been renovated, if it is in a desirable school district, sits on the corner of a very busy street, is in a new home community or a historical district, is a water-front or not, or even if it is in an urban high-rise luxury condo within blocks of a low income housing. Also, there are issues with data discrepancies(the data is only as good as what is entered by a consumer) - mobile or pre-fabbed homes listed as single families, rentals listed as sales, condos/townhomes listed as single-families, and so on.

As Zillow clearly states "It is not an appraisal. It is a starting point in determining a home's value." Look at the table below and decide for yourself if you should rely on a Zillow estimate, or on what your real estate agent tells you!

Last updated: January 11, 2011
Note: Zestimate accuracy is computed by comparing the final sale price to the Zestimate on or before the sale date. The data herein is computed for the three-month period ending September 30, 2010.

Refer to Zillow.com for the above information.
1/11/2011 Pending Home Sales Continue Recovery, Gradual Improvement Seen in 2011

Washington, DC, December 30, 2010 Pending home sales rose again in November, with the broad trend over the past five months indicating a gradual recovery into 2011, according to the National Association of REALTORS®.

The Pending Home Sales Index,* a forward-looking indicator, rose 3.5 percent to 92.2 based on contracts signed in November from a downwardly revised 89.1 in October. The index is 5.0 percent below a reading of 97.0 in November 2009. The data reflects contracts and not closings, which normally occur with a lag time of one or two months.

Lawrence Yun, NAR chief economist, said historically high housing affordability is boosting sales activity. In addition to exceptional affordability conditions, steady improvements in the economy are helping bring buyers into the market, he said. But further gains are needed to reach normal levels of sales activity.



The PHSI in the Northeast increased 1.8 percent to 72.6 in November but is 6.2 percent below November 2009. In the Midwest the index declined 4.2 percent in November to 78.3 and is 7.7 percent below a year ago. Pending home sales in the South slipped 1.8 percent to an index of 91.4 and are 7.2 percent below November 2009. In the West the index jumped 18.2 percent to 123.3 and is 0.4 percent above a year ago.

If we add 2 million jobs as expected in 2011, and mortgage rates rise only moderately, we should see existing-home sales rise to a higher, sustainable volume, Yun said. Credit remains tight, but if lenders return to more normal, safe underwriting standards for creditworthy buyers, there would be a bigger boost to the housing market and spillover benefits for the broader economy.

The 30-year fixed-rate mortgage is forecast to rise gradually to 5.3 percent around the end of 2011; at the same time, unemployment should drop to 9.2 percent.

For perspective, Yun said that the U.S. has added 27 million people over the past 10 years. However, the number of jobs is roughly the same as it was in 2000 when existing-home sales totaled 5.2 million, which appears to be a sustainable figure given the current level of employment, he explained.

All the indicator trends are pointing to a gradual housing recovery, Yun said. Home price prospects will vary depending largely upon local job market conditions. The national median home price, however, is expected to remain stable even with a continuing flow of distressed properties coming onto the market, as long as there is a steady demand of financially healthy home buyers.

Existing-home sales are projected to rise about 8 percent to 5.2 million in 2011 from 4.8 million in 2010, with an additional gain of 4 percent in 2012. The median existing-home price could rise 0.6 percent to $173,700 in 2011 from $172,700 in 2010, which was essentially unchanged from 2009.

As we gradually work off the excess housing inventory, supply levels will eventually come more in-line with historic averages, and could allow home prices to rise modestly in the range of 2 to 3 percent in 2012, Yun said.

New-home sales are estimated to rise 24 percent to 392,000 in 2011, but would remain well below historic averages, while housing starts are forecast to rise 21 percent to 716,000.

Yun sees Gross Domestic Product growing 2.5 percent in 2011, and the Consumer Price Index rising 2.3 percent.

The National Association of REALTORS®, The Voice for Real Estate, is Americas largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

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*The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.

NOTE: The next Pending Home Sales Index will be released January 27, and existing-home sales for December will be reported January 20; release times are 10:00 a.m. EST.

REALTOR® is a registered collective membership mark which may be used only by real estate professionals who are members of the NATIONAL ASSOCIATION OF REALTORS® and subscribe to its strict Code of Ethics. Not all real estate agents are REALTORS®. All REALTORS® are members of NAR.

Information about NAR is available at www.realtor.org. This and other news releases are posted in the News Media section. Statistical data, tables and surveys also may be found by clicking on Research.

Source: NATIONAL ASSOCIATION OF REALTORS®
1/2/2011 Existing-Home Sales Resume Uptrend with Stable Prices

Existing-home sales got back on an upward path in November, resuming a growth trend since bottoming in July, according to the National Association of Realtors®.

Existing-home sales1, which are completed transactions that include single-family, townhomes, condominiums and co-ops, rose 5.6 percent to a seasonally adjusted annual rate of 4.68 million in November from 4.43 million in October, but are 27.9 percent below the cyclical peak of 6.49 million in November 2009, which was the initial deadline for the first-time buyer tax credit.

Lawrence Yun, NAR chief economist, is hopeful for 2011. Continuing gains in home sales are encouraging, and the positive impact of steady job creation will more than trump some negative impact from a modest rise in mortgage interest rates, which remain historically favorable, he said.

Yun added that home buyers are responding to improved affordability conditions. The relationship recently between mortgage interest rates, home prices and family income has been the most favorable on record for buying a home since we started measuring in 1970, he said. Therefore, the market is recovering and we should trend up to a healthy, sustainable level in 2011.

The national median existing-home price2 for all housing types was $170,600 in November, up 0.4 percent from November 2009. Distressed homes3 have been a fairly stable market share, accounting for 33 percent of sales in November; they were 34 percent in October and 33 percent in November 2009.

Foreclosures, which accounted for two-thirds of the distressed sales share, sold at a median discount of 15 percent in November, while short sales were discounted 10 percent in comparison with traditional home sales.

Total housing inventory at the end of November fell 4.0 percent to 3.71 million existing homes available for sale, which represents a 9.5-month supply4 at the current sales pace, down from a 10.5-month supply in October.

NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I., said good buying opportunities will continue. Traditionally there are far fewer buyers competing for properties at this time of the year, so serious buyers have a lot of opportunities during the winter months, he said. Buyers will enjoy favorable affordability conditions into the new year, although mortgage rates are expected to gradually rise as 2011 progresses.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 4.30 percent in November from a record low 4.23 percent in October; the rate was 4.88 percent in November 2009.

In the short term, mortgage interest rates should hover just above recent record lows, while home prices have generally stabilized following declines from 2007 through 2009, Yun said. Although mortgage interest rates have ticked up in recent weeks, overall conditions remain extremely favorable for buyers who can obtain credit.

A parallel NAR practitioner survey shows first-time buyers purchased 32 percent of homes in November, the same as in October, but are below a 51 percent share in November 2009 from the surge to beat the initial deadline for the first-time buyer tax credit.

Investors accounted for 19 percent of transactions in November, also unchanged from October, but are up from 12 percent in November 2009; the balance of sales were to repeat buyers. All-cash sales were at 31 percent in November, up from 29 percent in October and 19 percent a year ago. The elevated level of all-cash transactions continues to reflect tight credit market conditions, Yun said.

Single-family home sales rose 6.7 percent to a seasonally adjusted annual rate of 4.15 million in November from 3.89 million in October, but are 27.3 percent below a surge to a 5.71 million cyclical peak in November 2009. The median existing single-family home price was $171,300 in November, which is 1.2 percent above a year ago.

Existing condominium and co-op sales declined 1.9 percent to a seasonally adjusted annual rate of 530,000 in November from 540,000 in October, and are 32.2 percent below the 782,000-unit tax credit rush one year ago. The median existing condo price5 was $165,300 in November, down 5.5 percent from November 2009. At the current stage of the housing cycle, condos are offering better deals for bargain hunters, Yun said.

Regionally, existing-home sales in the Northeast rose 2.7 percent to an annual pace of 770,000 in November but are 33.0 percent below the cyclical peak in November 2009. The median price in the Northeast was $242,500, which is 9.2 percent higher than a year ago.

Existing-home sales in the Midwest increased 6.4 percent in November to a level of 1.00 million but are 35.1 percent below the year-ago surge. The median price in the Midwest was $138,900, down 1.1 percent from November 2009.

In the South, existing-home sales rose 2.9 percent to an annual pace of 1.76 million in November but are 26.1 percent below the tax credit surge in November 2009. The median price in the South was $148,000, down 2.6 percent from a year ago.

Existing-home sales in the West jumped 11.7 percent to an annual level of 1.15 million in November but are 19.0 percent below the sales peak in November 2009. The median price in the West was $212,500, up 0.4 percent from a year ago.

The National Association of Realtors®, The Voice for Real Estate, is Americas largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

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NOTE: NAR also tracks monthly comparisons of existing single-family home sales and median prices for select metropolitan statistical areas, which is posted with other tables at: www.realtor.org/research/research/ehsdata. For information on areas not included in the report, please contact the local association of Realtors®.

Information about NAR is available at www.realtor.org. Copyright NATIONAL ASSOCIATION of REALTORS® | Headquarters: 430 North Michigan Avenue, Chicago, IL 60611

12/20/2010 2011 Freddie Mac Predictions on mortgage rates, home prices, home affordability, refinancing, delinquency rates.

Freddie Mac analysts point to five features that they believe will likely characterize the 2011 housing and mortgage markets:

1. Low mortgage rates. With Fed observers expecting the central bank to keep the federal funds rate at its current target range of 0 percent to 0.25 percent for most (or all) of 2011, relatively low mortgage rates will be a feature of the 2011 mortgage market. Thirty-year fixed-rate loans are likely to remain below 5 percent throughout the year, and initial rates of 5/1 hybrid adjustable-rate mortgages will likely remain below 4 percent in 2011.

2. Prices have hit bottom. House prices are likely to begin a gradual, but sustained recovery in the second half of 2011.

3. Housing will remain affordable. With affordability high, many first-time buyers will be attracted to the housing market in the New Year, likely translating into more home sales in 2011 than in 2010.

4. Refinances will dwindle. Many eligible borrowers have already refinanced and the federal Making Home Affordable refinance program is expiring on June 30. While fixed-rate loans are likely to remain low, they will move up gradually, making it even less likely that refinances will be attractive to most home owners.

5. Delinquency rates will decline. Based on the last several business cycles, the share of loans that are 90 or more days delinquent or in foreclosure proceedings known as the "seriously delinquent rate" generally crests within a year of the start of the recovery in payroll employment, and this economic recovery appears to fit within that pattern. Payrolls began to rise last January, and by the spring the seriously delinquent rate had begun to fall.

Source: Freddie Mac (12/09/2010)
12/20/2010 New IRS 1099 Requirements for All Landlords

Starting in 2011, there is a new tax requirements for landlords. All landlords who receive $600 or more in rent for the year must send a 1099 to all service providers that the landlord paid $600 or more during the year, such as plumbers, carpenters, yard services, and repair people. The purchase of goods is not included within the reporting requirement.

The new requirement applies to owners of both residential and commercial property. Prior to 2011, this requirement had only applied to those involved in full-time property management, but now the requirement covers all types of landlords. Landlords will need to gather federal tax ID numbers from service providers in order to file the 1099s. Failure to file the 1099s with the IRS can result in fines of $50 per 1099 not filed with the IRS. In 2012, these requirements will expand to cover providers of good to landlords.

NAR actively opposed this change in the law and is working with others to have this requirement repealed or otherwise modified. Congress took this action in order to assure that income paid to contractors can be verified through a section 1099. To read more about the history of the law as well as the actions NAR has taken to oppose this change in the law, click here.

Source:  REALTOR.org
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