How Much Is Your House Worth?

[PapaBear]

http://www.zillow.com/ :cool:

The prices may not be what you think they should be, but they are in the range and are updated frequently.

[Chippysgt]

The problem I see with it is that it listed comparables for my house that are not even close to comparable. I live in a custom neighborhood where sales have been slow for a couple of year. The only comparable they listed was one that was no where near as nice as my house and it sold in January for 440K I am right around the corner and have twice the house and they say it is worth 350K. The house across the street sold for 605K a year and a half ago and I grant you that was when things were out of control but the house next door to me sold 60 days ago for 450K and it is 200 sq ft smaller and the property is smaller and it doesn't have the all the upgrades I have. So I have a problem with this website. I don't think they have people on the ground, going to the area and learning about the neighborhoods.

I just sent them a message and told them to straighten out and fly right or take me off their list.

[chp36]

This was pretty accurate with the houses in my area. However, it has my home undersized by over 200 sq. ft. and valued approx $80,000 under a recent appraisal. They obviously do not keep it accurately updated since I added that 200 sq ft a year ago.

[PapaBear]

This was pretty accurate with the houses in my area. However, it has my home undersized by over 200 sq. ft. and valued approx $80,000 under a recent appraisal. They obviously do not keep it accurately updated since I added that 200 sq ft a year ago.


You may have added on a year ago and not had it reappraised; or, you may have added on and not taken out a permit to show an increase in footage; or, you may have forgotten that in the past year the housing market in California has declined in price about 4% to 5%. Fear not! A new year is here and the market is expected to blossom once again.:noidea:

[David]

A house just across the street was for sale recently.

It's a nice, small one story house on a fairly small lot, built circa WWII, good shape, and in a good neighborhood.

They wanted $405,000 for it. :shock:

To get a fairly nice house in Granite Bay, you're typically looking at $750,000 or more.

[HWY Ranger2B]

http://www.zillow.com/ :cool:

The prices may not be what you think they should be, but they are in the range and are updated frequently.

You could actually do a google search and come up with a million different companies that will give you a free analysis, however, I prefer http://www.homevaluehunt.com/ You put in your address and zip then give them your name, phone, and email and they will email you instantly a list of homes sold in in your area. This is going to be the most accurate assessment of your home value because you can essentially do a self-appraisal on your own home and figure out your own value. Without giving a long winded appraisal lecture, you can find 3 comparable homes to yours, take their sq. ft. selling price and multiply that by your sq. ft. Then you will add/subtract to your price any improvements you have done (i.e. pool, garage, yard, etc.) When you have a final number, you can add 1-3% to that figure to adjust for inflation. This will give you an approximate value of your home.

Simple facts: CA real estate will not be what it was for another 20-25 years, barring anymore Sept. 11 type attacks. The market has stabalized and more likely than not, will take a hit over the next few years. If you plan to sell, Sell now! When interest rates start climbing next year, you will see a lot fewer buyers capable of getting loans. In 2007, 53% of all home loans are adjustable rate loans coming into their first adjustment period. You will see the number of foreclosures rise, exponentially, forcing the real estate market to have a glut of homes for sale. Get ready, we are in for some turbulent times.

I have played this real estate game for the last 5+ years and am ready to follow my CHP dream:idea:

[chp36]

You may have added on a year ago and not had it reappraised; or, you may have added on and not taken out a permit to show an increase in footage; or, you may have forgotten that in the past year the housing market in California has declined in price about 4% to 5%. Fear not! A new year is here and the market is expected to blossom once again.:noidea:

Actually, I started the project a year ago, had city permits, property taxes went up, and it was appraised about four months ago. These types of web sites work off of recent sales and averages in your area without taking remodel, addition or improvement factors into consideration. Given, the surrounding prices in my area were very close for the floor plan of the origional structure sold. The 5% decrease would only calculate to about a $20,000 difference.

[SemiMBA]

Zillow is a totally automated system which uses a similar algorithm that Google uses to conduct searches. (This is also a totally automated mass of networked computers). Of course it has its limitations and is not meant to be totally accurate. It does use sales and transfer data which is updated about every 180 days and calculates the relative appreciation (or depreciation). I have found it be around 10% off in a market which is relatively saturated (which is almost all of the SF Bay Area)

If you talk to 10 agents in your area, you will get 10 different prices (some as much as 30% different). If you have you home appraised with 10 different appraisers, you will obtain 10 different prices.

Housevalues.com, and other sites are merely phishing and data gathering sites used to gain leads for local real estate agents. Agents will subscribe to the service and call on you. (Personally I always enter false data to avoid just this).

Micah – I am wondering why you feel that home prices won’t appreciate for 20-25 years? I bought my first house in 1982 when the APR was around 16%. We thought that this 3/1 had a top price of $121K. I noticed that it just sold again for a little over $740K (and that is in a 50 year old neighborhood in a crappy part of Fremont). Since 1982, home values have ebbed and flowed about every 7 years. People are still coming to the Golden State and at least the tech sector continues to flourish (Austin is too humid – that is why a lot of companies that relocated in the 1990’s moved back). My prediction: Home valves will drop through 2007 and then stabilize until around 2010. By 2010, the newer solar technologies being developed today will come to fruition and a new tech sector will grow primarily in the south bay and in the Livermore areas. By 2030, global warming will have flooded the entire town of Newark (no big loss if you have ever been there) and I will finally have my home by the bay. :o)

It is interesting that you mentioned Granite Bay. My bro just moved up there. His home in the slums (his words, not mine) is worth just over a million. It is a nice area – how close is this to the CHP HQ?

[HWY Ranger2B]

Micah – I am wondering why you feel that home prices won’t appreciate for 20-25 years?

I didn't say prices wouldn't appreciate. I said they wouldn't experience what we have seen in the last 5 years, which was anywhere from 10-25% growth every year. What we just experienced was driven mostly by people who had money to buy a second home, see the appreciation, and roll those profits into more or larger properties. Most of these people were baby-boomers who are at the peak of their spending years and for the most part have a decent chunk of change saved up. Near the end of this RE craze, you saw people of my generation (25-40), jumping in and buying homes with zero down and trying to flip properties. Eventually this is what killed the market, we reached a stage where supply was more than demand (too many houses, too many sellers) and the market started correcting itself. Interest rate hikes also helped (it got rid of the marginal buyers).

My opinion on the RE market greatly leveling out is due to the nature of our economy. We are a very strong economy right now and will continue to be strong for a few more years, however, most of the baby-boomers are coming into their retirement years. When they retire, they will cut back on spending (they are in the peak of their spending years right now). Since they constitute about 100 million of our population (about 1/3), this will be a huge hit on the economy as they curtail their spending. My generation is about half their size and no where near the capacity to make up for this spending deficit. As you see, this sets our economy up for some tough times. As these tough times hit, you will see people losing jobs and getting laid off, because companies aren't showing the huge profits anymore. Profit losses, lead to stock devaluation, which leads to loss in paper profits/wealth. Some predict this will cause a run in the RE market again, but I believe this will only apply to those who have a a lot of cash in their bank accounts. I base my opinions on the many economic articles and financial articles I have read in the last 3 years and simple common sense. We all know baby boomers are retiring, we all know retirees spend less in retirement than when the were working, we all know my generation is much smaller than the baby boomers. If you add this all up, you start seeing a problem.

To finish it off, I believe that RE is in for a choppy future, because if we hit some serious economic troubles ahead, many people who have been living off their RE equity fortunes (their 2nd mortgages and equity LOC on their houses) will no longer be able to make their payments. To give you an example, according to the Assessor Recorder, County clerk of San Diego County: Greg Smith, there were 62 Trust deed sales (basically foreclosures) in Jan. 2006. As of Jan. 2007 that number has increased to 457. If you were to apply this 700% increase by the 58 counties in CA, you start seeing a problem! This influx of foreclosures on the market will create a large supply, with not enough demand. Sure CA is a huge state and there will always be buyers, but if the economy starts to tank, you will see the number of buyers dwindle due to job loss.

Of course, this is all my opinion and you can take it with a grain of salt. I love RE and will keep my licenses current even if I get in the CHP. Afterall, if I have to move, I can buy another house without having to find a broker. I have had fun in RE, but my personality and heart are in LE and have been so since college. Going thru the hiring process is a dream of mine and I hope I make it thru and get patrol the roads someday.:smile:

[SemiMBA]

Oh – I understand what you are saying now. I agree with that. I think flipping for a big profit is over for at least the next 10-15 years. I think the basic problem is with the mortgage brokerage business where there was a lot of falsification and stated income loans to people who had no business getting loans at all.

Did you see what happened in a few “nice” neighborhoods in Stockton? Mortgage brokers used stated income loans and zero downs to get loans for people who in turn used these homes as Meth labs. Of course this drives down the home values for everyone in the neighborhood (and makes the houses unlivable). I know a couple in Chico who rented out there home to another “nice couple” who used the house as a Meth house. The home had to be practically demolished and rebuilt.

I am on my 7th home and have made money at every move. I am still kicking myself in the butt for not extending myself to buy my late father’s home on the Napa River when he died. It was worth $310K in a down market and now it is worth over $1.6Mil later (10 years appreciation). Can’t do better than that!

It is good that you keep your licenses after getting on the patrol. My brother is looking for a second career after he retires in 3 years (nice gig – he can retire at 90% of a LTs wage at the age of 50). He can collect his pension and still do another job (I think he is interested in teaching at the university level). I am looking into getting re-certified and going back into LE after a 15 year hiatus. Believe me, a defined pension is a good thing. You won’t find anything close to it in the private sector.

How far along in the process are you? I just applied to the SFSD myself. It will be a big cut in pay but I enjoyed LE and think it will be a better deal for me in the long term.

I just re-read the thread. It was David who mentioned Granite Bay. They have really nice homes up there. I really don't like the Sacramento area in general, but Granite Bay is pretty secluded from the rest of the area. I don't recall seeing a single family home in the area for under $900K. (unless things have dropped that much)

[chp36]

Micah,

I agree with alot of what you have stated. There was a article in a local newspaper showing that the begining stage of forclosure has doubled or more in almost all counties in California. I think the only contributing factor in this you left out was the Interest only mortgage everyone used to buy homes they could not afford. Now that they have to pay principal and interest, they are up s*$ (s@$)* creek without a paddle.:hitwall:

If you can not swing the real payment then don't buy it.:noidea:

[SemiMBA]

Micah,


If you can not swing the real payment then don't buy it.:noidea:

There are two basic problems

1. Even if you have 20% down for a conventional loan with conventional rates (conforming, etc), on a typical home in the Bay Area, you will be paying a mortgage of somewhere around $4,000. Under typical rules, you would have to be making around $12G's a month to qualify (and this is for a starter home). If you didn't have access to non-typical loan programs, then almost no one would be able to start home ownership.

2. I don't know about you, but when I bought my first home, I was making $840 every two weeks with the ACSO. Even with two incomes, my wife and I could barely make the payments. Of course, if we had the same payments now, it would be no sweat. Most people, even those who started home ownership in the 1950's, had problems at first with making the payments.

Even with 8% forclosure rates (which is on the very high end), that still means that 92% of the loans are good. The home mortgage business is one of the most lucrative industires in the US.

[HWY Ranger2B]

How far along in the process are you? I just applied to the SFSD myself. It will be a big cut in pay but I enjoyed LE and think it will be a better deal for me in the long term.

I just had my QAP on Tuesday. Awaiting results.

In regards to mortgage business being a good business, I agree to some extent-they live and die by interest rates. I have a tenant who is a mortgage company and they have had a hard go at it the last year. I won't be surprised to see a lot of new laws getting passed in the next few years, cracking down hard on lending practices. I think this will make the business a lot harder. In a way, that is good because like you said, loan officers have done a lot of unethical things in the last few years to make money. New laws are always difficult, but it brings about reformation and inovation. Shame on the unethical loan brokers, the rest of the industry is going to be punished because of them and a lot of companies will close their doors because they won't be able to cope.

[HWY Ranger2B]

Just FYI, here are interesting articles that those of you following this thread may be interested in.

http://money.cnn.com/2005/10/21/news/newsmakers/barrack/index.htm
http://www.realestatejournal.com/buysell/mortgages/20070221-simon.html

[SemiMBA]

Interesting articles. I am at a crossroads right now. My tenant just moved out of our Sunnyvale home. It is in a "working class" area of the city and I am always afraid of getting riff-raff (getting rid of bad tenants is a pain in the rear. The law favors deadbeats). My wife are I are thinking about selling. I am running some tax scenerios to figure out if we should just take the 20% capital gains hit, or do a transfer (1081 - I think that is the tax code for this type of transfer).

Despite the naysayers, real estate is a great investment. I see a lot of potential growth still in the Bay Area and in the northern counties. (lots of water). One area that is stagnent and dropping very quickly is Colorado Springs. The foreclosure rate is twice the national average.

[HWY Ranger2B]

Interesting articles. I am at a crossroads right now. My tenant just moved out of our Sunnyvale home. It is in a "working class" area of the city and I am always afraid of getting riff-raff (getting rid of bad tenants is a pain in the rear. The law favors deadbeats). My wife are I are thinking about selling. I am running some tax scenerios to figure out if we should just take the 20% capital gains hit, or do a transfer (1081 - I think that is the tax code for this type of transfer).



It is called a 1031 exchange. Know what you are doing before you follow thru-talk to a CPA or tax attorney first. I know everyone always says, this but I am serious. We did a very complicated 1031 last year and I failed to consult a tax attorney first. I am currently paying him big bucks to make sure everything will be kosher with IRS. It was our first 1031 and we naively followed others advice-big mistake!:doh: Talk to an expert first! That being said, 1031's are great ways to save buckoo tax dollars. If you plan to sell, then now is definately the time to do it, maximize your returns, then re-buy when the market has declined. If you don't mind continuing as a landlord, you still can't lose, especially if you have a positive cash flow on this property.

I got my feet wet on our first investment property-a 34 unit apartment complex that I re-habbed, booted out the dead-beats, and then sold last year. The laws in this state are ridiculously slanted towards tenants. I once heard that in Utah, they have a law that tenants who are 30 days late on their rent can be arrested and thrown in jail, until the rent is paid. I don't know if this is true, but can you imagine how nice that would be?!:lol:

[futurechp]

I am a Real Estate Broker in the Bay Area and this is what my opinion is on the real estate market:

All of you have been pretty accurate about what is going on in the market but I decided to elaborate a little more on a few things. The slow real estate is being affected by several things but mainly by the qualification standards for today's loan programs. In the last 6-12 months, between 50-75% of all sub-prime lenders (lenders who made loans to those with less than a 620 credit score) have either gone bankrupt or are filing for bankruptcy. Very few exist today. The reason why they are in these situations is because most of their loans were 100-106% financing with an adjustable rates, and with the recent interest hike most of these borrowers went into default or foreclosure. This is the rise of defaults and foreclosures you're seeing today. On top of that, most lenders make most of their profits when the sell the loans they have made to other investors. Well with the interest rate hike and default/foreclosure hike, these sub-prime lenders couldn't sell their loans and lost most, if not all, of their money. Then add to that negative news in the media and the fact that the real estate market fluctuates every 7-10 years.

I remember earlier this year when I had clients tell me that they were going to wait until the weather got better before they decided to sell. I advised against this because you could see where this market was going. Now with the weather better and interest rates still low (yes today's rates are still low compared to those of many years ago), my clients are now asking me why the market is still slow and why is it getting worse in a lot of areas. My response: Lender Qualification Standards are a lot higher now. Because of the crash of the sub-prime lenders, the lenders still out there have increased their standard. A year ago, someone with a 580 credit score could buy a home 100% financing with interest only payments. Today, for 100% financing you must have a 660 credit score with some lenders and 680 credit score with other lenders. Any lower credit score and you will need 5-15% down payment (and how many people do you know have that amount in the bank?). And there is some speculation that it may jump to a minimum of 700 credit score.

This unfortunately has eliminated many home buyers from the market. And it was this group of home buyers that were the reason for the real estate boom. In some areas the sub-prime homebuyers also tended to be a lower income group. This group was buying the lower priced homes, in turn those homeowners then bought up, so on and so on. At least this was the case in the East Bay Area where I work. So it reverts back to the simple principle of supply and demand: prices drop when the supply exceeds demand (or in this case available demand, because many want to buy homes but can't qualify). My partner and I have over 20 listings and a few have gone in & out of escrow a few times due to the buyer not being able to qualify for the loans. And I am working with a few potential buyers that are currently working on raising their credit score and savings money (they have the income, but low credit score and no money saved up).

So this is my take on the market, at least in my area but I'm pretty sure this is the same case in a lot of areas. But for the investors out there, some good deals will be popping up in the next 6-18 months. You're seeing more and more REO (Bank owned) property coming up for sale and these banks want to just get rid of the properties they are forclosing on. An agent in my office currently has 50 REO homes for sale :shock: and they are literally dropping the prices every week to get the homes sold.

Just like Warren Buffett said: Always buy, buy, buy in a down market. Then sell, sell, sell in an up market. Sure he was talking about stocks but you can apply the same to real estate.

[AyatollahGondola]

Do you see any evidence that government, or quasi government entities are aiding in propping up the market? Seems to me we have a lot of low income, assistance type programs being advertised in the paper now.

[futurechp]

Do you see any evidence that government, or quasi government entities are aiding in propping up the market? Seems to me we have a lot of low income, assistance type programs being advertised in the paper now.

Well it was in the media a few weeks ago that the government was thinking of getting involved in the real estate market by providing home loans to sub-prime homebuyers. How promising is this? I really don't know:noidea: .

As far as all the advertisement for low income and special assistance programs, there are some out there but they are difficult to qualify for. For example a lot of cities have special down payment assistance programs where they put up to 10% for the down payment. The homebuyers make no payments on that loan and are only obligated to pay back the loan when they refinance or sell. But again this is for low income households. The problem in the bay area, where roughly 14% of homeowners are estimated to actually be able to afford their homes, is that $5,000 per month income is considered low income with today's prices. And anything below that is really insufficient income to buy a home (another problem were the stated income loans-whole other problem and discussion).

So lets say that two families want to buy a home together and four people will be on title. Well for 100% financing, all of them will have to have credit scores over 660 because lenders usually go off of the lowest score they have. And if 3 of them have 660 but one has a 640, it wont work. Now you may say, "Well take the 640 off title." But the problem is they need the 640's income to qualify.

Now I'm not saying that all 100% financing in the sub-prime market is gone, because there are still some lenders doing it, but it is a lot tougher and I predict it will only get tougher. It all depends on the lender you go through (and by 'lender' I mean bank, not loan officer or mortgage broker).

Look, you can run the numbers yourself: If a first time homebuyer is purchasing a $400,000 starter home and gets a 20% assistance for down payment from the city/county/state or wherever, he will still have a $2500-$3000 monthly payment with PITI (Principal, Interest, Taxes, Insurance) assuming NO PAYMENTS ON THE 20%. In order to truly qualify, the monthly income for the purchaser should be around $5500-$6500 per month.

[AyatollahGondola]

But aren't there down payment assistance loans and grants available for some of those state, city, county programs? I thought i saw some bonds passed specifically for that?

[futurechp]

Yes, there are special city, state and county programs to help assist homebuyers. I know that the State of California has a program where they provide a 3% down payment to reduce the principal amount or for closing costs. I've done a few of these transactions myself and trust me 3% doesn't make a difference in your monthly payments.

But again, the buyers must qualify with enough monthly income and a good credit score. And remember, a lot of these assistance programs are second mortgages placed on the properties the purchasers are buying. So the buyers still need to qualify for a conventional 1st mortgage through a bank. And the bank financing the 1st mortgage still considers it 100% financing because the buyer is financing the full purchase price (nothing is coming straight from their account).

So to answer your question, yes there are assistance programs. But the problem is that the qualification standards for 100% financing has increased. As a result, it has left thousands of people that could buy 1-2 years ago out of the real estate market.

[AyatollahGondola]

As a result, it has left thousands of people that could buy 1-2 years ago out of the real estate market.
I'm not sure if that is a good thing or a bad thing yet. With under-performing loans being at the root of the housing boom which in turn drove up the pricing to levels that leaves those same home buyers unable to qualify for the loans; Kind of seems like a pyramid scheme to me that only benefits those able to extract profits before the collapse. I don't see where subsidized housing benefits America. Well....California anyway

[frwycop]

The site valued my house at 475 K.
I bought a corner house, with a with only 1 house adjecent to mine, ( clear view on 3 sides) that was in forclosure 6 yrs ago, after my divorce using the Cal Vet loan for $200,000.00. I was BK.

I upgraded it little by little, 90% of the work made by me including an RV access. Invested some 30 k, which added 200K more to the value.

Can't get real state agents off my property, offering me 700K.

And who said Motors can't make right choices?


(well, women not included):tape:

[frwycop]

BTW this post sounds more like a Goverment vs Real State Agents convention. Talking about demographics, percentage, living costs, way too book smart for me.
Future FUTURECHP, MICAH, SEMIMBA,you guys would be good Sergeants working at Headquarters.

I bet 95% of us reading this can care less.:noidea:

[emcviper]

BUMP - This thread is interesting now, 2.5 years later...

[dw]

BUMP - This thread is interesting now, 2.5 years later...Interesting? Depressing.... :sad: