Has Zillow gotten more accurate predicting Sacramento Home Values? The answer is here...

If you have been reading my blog for a while, then you probably already know that I usually get a chill down my spine when one of my clients mentions "the Z word." What's the Z word? Zillow. What is Zillow? Zillow.com is a website that, among other things, provides information about neighborhoods and properties.

Zillow is a neat website. I have an agent profile on Zillow. I have clients who have found me using Zillow. However, my general thought about Zillow is that while it's a fun consumer tool that provides property information to people looking to buy or sell (or even rent property now), the vast majority of the time, the "Zestimate" (aka, the value that the website dreams up for a certain property), is usually not close to the market value of a Sacramento area property, and the homes listed for sale on the website are not current.

I posted a few times last year about how the sales prices of my transactions compare to Zillow data. I've closed a total of 7 transactions so far in 2014 between Janurary and February, so let's take a look to see how close Zillow is to the actual selling prices of these properties. This information is CURRENT as of today, March 6, 2014.

3715 Tallyho Drive #12, Sacramento, CA 95826; this was a condo I listed (represented the seller in a short sale) in Rosemont. The original listing price was $85,000, and this sold on 1/10/14 for $80,000. Zillow's Zestimate: $145,681. YIKES -- approximately 71.39% above it's selling price. WOW. Something is way off here.

1433 Sebastian Way, Sacramento, CA 95864; this was a home I sold (represented the buyer) in the Arden area. The original listing price was $215,000, and this sold on 1/10/14 for $215,000. Zillow's Zestimate: $178,000 -- approximately 17.21% below it's selling price.

213 Muckross Abbey Court, Lincoln, CA 95648; this was a home I sold (represented the buyer) near in Twelve Bridges Lincoln. The original listing price was $349,900, and this sold on 2/6/14 for $361,500. Zillow's Zestimate: $341,000 -- approximately 5.67% below it's selling price.

2237 Eastwood Drive, Roseville, CA 95747; this was a home I listed (represented the seller) near in the Fiddyment Farms area in Roseville. The original listing price was $459,900, and this sold on 2/25/14 for $460,000. Zillow's Zestimate: $437,610 -- approximately 4.87% below it's selling price.

8238 Leesburg Way, Elk Grove, CA 95624; this was a home I sold (represented the buyer) near Monterey Trail High School in Elk Grove. The original listing price was $250,000, and this sold on 2/28/14 for $245,000. Zillow's Zestimate: $220,000 -- approximately 10.2% below it's selling price.

4900 Sir Henry Court, Fair Oaks, CA 95628; this was a home I sold (represented the buyer) near Miller Park in Fair Oaks. The original listing price was $739,900, and this sold on 2/28/14 for $719,000. Zillow's Zestimate: $680,000 -- approximately 5.42% below it's selling price.

2656 Harkness Street, Sacramento, CA 95818; this was a home I listed (represented the seller) in Land Park. The original listing price was $275,000, and this sold on 3/5/14 for $280,000. Zillow's Zestimate: $273,000 -- approximately 2.5% below it's selling price.

I have said it before and I will say it again...I think two conclusions can be drawn from the information above. First, Zestimates are generally not accurate. They don't take into consideration property features that can not be quantified. Is it on a main street, is it near a park, was the kitchen remodeled, have unique architectural features...? Second, our dynamic Sacramento area real estate market is now increasing in value, and Zillow has a long way to go to catch up to pricing these trends and factoring them into their mathematical equations that determine these values. But it is still a fun website for entertainment purposes.

Sacramento Median Home Price February 2014

Well there you have it. After a slower January for sales volume and price (which is pretty typical if you look at trends over the last decade), Sacramento's median home price for February 2014 bounced back up to $260,000. This does not surprise me at all, and February was a brisk month for my business. I'm guessing March will be brisk too with lots of closings given there's a high number of pending sales...I'm not anticipating a huge upswing in price for next month, and expect things to continue with some modest price appreciation this year. Our current median home price is still FAR below the median from the peak of Sacramento's real estate market in the summer of 2005 (which was just a touch under $400,000). But it's nice to say that it's also FAR above the median home price at the bottom of the Sacramento market in winter 2011 (about $160,000). A trend that I am continuing to notice for the last several months is folks who purchased a home at the bottom of the market in 2009-2011 are calling wanting to sell their home and purchase a larger one (or smaller one, relocate to a different neighborhood, etc). If you purchased a Sacramento home during that timeframe, there's a good chance your home has increased in value in the range of 20%-35% depending on when you bought and where your home is located...so it's a great time to do sell and purchase another home. Of course if you would like me to provide you an estimate of your home's value, I'm happy to do that. Just email me.

Rent vs Buy a home in Sacramento? What the hard facts say.....

The last few years around this time I have written blog posts detailing the monthly mortgage payments vs. average rent payments in certain neighborhoods in Sacramento. I thought I would start 2014 with a similar post, updated with today's interest rates, average Sacramento home prices, and average rents.

2014 has started with a bang. I have been super busy with both home buyers and sellers. Who has been calling me? Prospective home buyers who finally have decided that now is the time to buy a home in Sacramento, folks relocating to the area, or looking for a bigger home who also need to sell their current home. I have also been called by several folks so far in 2014 who are looking to sell an investment property they've been holding on to. Interesting...

While home values have increased since last year, it is still currently more affordable in many areas to buy a home in Sacramento than rent a home. And compared to our market's peak in 2005, prices are still extremely low, plus rents seem to have increased.

When you take into consideration the average home price and probable monthly mortgage payment in particular Sacramento neighborhoods vs. the average rent, often times the mortgage payment is less. Plus often times the 'average' home that is purchased is much larger or nicer than the 'average' home rented. Let's take a look at a few different areas...just for the sake of citing my information sources, for average home price (used to calculate mortgage payment scenarios) I am using most recent January 2014 Trendgraphix data, which is taken directly from MLS, and for average rent I am using the most recent Q1 2014 Homepointe Quarterly Residential Rental Survey. For my mortgage payment calculations, I am basing it on a 4.5% interest rate (which is actually slightly above today's average market interest rates), and including the full PITI - loan principle, interest, monthly property taxes, and monthly homeowner's insurance (and mortgage insurance where applicable).

Natomas - 95833, 95834, 95835
Average single family home sale price: $264,000
Average rent for a 3 bedroom home: $1,340 (range $950 - $1,795)
30-Year Fixed VA Loan (Zero downpayment): $1,718
30-Year Fixed FHA Loan (3.5% downpayment): $1,952
30-Year Fixed Conventional Loan (10% downpayment): $1,660
30-Year Fixed Conventional Loan (20% downpayment): $1,422

Elk Grove / Laguna - 95757, 95758
Average single family home sale price: $303,000
Average rent for a 3 bedroom home: $1,380 (range $1,095 - $1,695)
30-Year Fixed VA Loan (Zero downpayment): $1,972
30-Year Fixed FHA Loan (3.5% downpayment): $2,173
30-Year Fixed Conventional Loan (10% downpayment): $1,906
30-Year Fixed Conventional Loan (20% downpayment): $1,632

Rosemont / College Greens - 95826, 95827
Average single family home sale price: $215,000
 Average rent for a 3 bedroom home: $1,259 (range $985 - $1,650)
30-Year Fixed VA Loan (Zero downpayment): $1,399
30-Year Fixed FHA Loan (3.5% downpayment): $1,589
30-Year Fixed Conventional Loan (10% downpayment): $1,352
30-Year Fixed Conventional Loan (20% downpayment): $1,158

Arden - 95821, 95825, 95864
Average single family home sale price: $217,000
Average rent for a 3 bedroom home: $1,258 (range $995 - $1650)
30-Year Fixed VA Loan (Zero downpayment): $1,412
30-Year Fixed FHA Loan (3.5% downpayment): $1,604
30-Year Fixed Conventional Loan (10% downpayment): $1,365
30-Year Fixed Conventional Loan (20% downpayment): $1,168

Carmichael, Fair Oaks - 95608, 95628
Average single family home sale price: $318,000
Average rent for a 3 bedroom home: $1,146 (range $900 - $1,800)
30-Year Fixed VA Loan (Zero downpayment): $2,069
30-Year Fixed FHA Loan (3.5% downpayment): $2,193
30-Year Fixed Conventional Loan (10% downpayment): $2,000
30-Year Fixed Conventional Loan (20% downpayment): $1,713

Citrus Heights, Orangevale - 95610, 95621, 95662
Average single family home sale price: $240,000
Average rent for a 3 bedroom home: $1,262 (range $995 - $1,800)
30-Year Fixed VA Loan (Zero downpayment): $1,194
30-Year Fixed FHA Loan (3.5% downpayment): $1,562
30-Year Fixed Conventional Loan (10% downpayment): $1,509
30-Year Fixed Conventional Loan (20% downpayment): $1,292

South Land Park, Pocket / Greenhaven - 95822, 95831
Average single family home sale price: $262,000
Average rent for a 3 bedroom home: $1,371 (range $995 - $1,795)
30-Year Fixed VA Loan (Zero downpayment): $1,705
30-Year Fixed FHA Loan (3.5% downpayment): $1,937
30-Year Fixed Conventional Loan (10% downpayment): $1,648
30-Year Fixed Conventional Loan (20% downpayment): $1,411

Obviously there are other tangible and intangible benefits to home ownership as well...for example, a tangible benefit is the fact you can write-off your mortgage interest on your income taxes, and also deduct some other related expenses each year. An intangible benefit might be that as a homeowner, you have the freedom to paint the walls, decorate, plant a garden, remodel, etc.

So clearly these numbers are just a baseline to give you an idea of housing affordability in certain areas. You definitely need to consult a loan officer to see what type of financing is the best fit for you, and ultimately just how much you can afford - and there are several variables that will affect your interest rate and terms. You should also speak with a CPA or qualified tax professional regarding the mortgage interest and other tax deductions to see how it will affect your particular situation. If you need a good referral to either one, feel free to contact me and I can put you in touch.

New Listing - 2656 Harkness Street, Sacramento / Land Park, CA 95818

Adorable 2 bedroom, 1 bathroom, 884sf Land Park home; it's the perfect blank canvas for your personal touches! You will love the spacious living room and formal dining area, built-ins, composition roof, wood floors under carpet, newer concrete driveway, exterior recently re-painted, newer sewer line, covered patio, 2-car detached garage, cute backyard! Don't wait! Offered at $275,000. For more photos and information, please visit 2656 Harkness Street, Sacramento, CA 95818.

Sacramento Median Home Price December 2013

The Sacramento median home price for December 2013 seems to have leveled off. This is good news because the crazy upward trajectory we experienced in the early part of the year was just not sustainable. I think the $250,000's is about where our Sacramento market should be, and if I wipe the haze off my crystal ball, I predict we will experience moderate price appreciation in 2014. Our current median home price is still FAR below the median from the peak of Sacramento's real estate market in the summer of 2005 (which was just a touch under $400,000). But it's nice to say that it's also FAR above the median home price at the bottom of the Sacramento market in winter 2011 (about $160,000). In fact one trend I have noticed in the last 6 or so months is folks who purchased a home at the bottom of the market in 2009-2011 are calling wanting to sell their home and purchase a larger one. If you purchased a Sacramento home during that timeframe, there's a good chance your home has increased in value in the range of 20%-35% depending on when you bought and where your home is located...so it's a great time to do sell and purchase another home. Of course if you would like me to provide you an estimate of your home's value, I'm happy to do that. Just email me.

A great start to 2014 - honored by the Sacramento Association of Realtors for my work at the state level...

Yep, that's me on stage. The short, young lady with the long hair in the middle. On Tuesday of this week, the Sacramento Association of Realtors held its annual Officer and Directors Installation and Awards Luncheon. For 2014, I am starting my 4th year as an elected member of the Board of Directors, and was "installed" at the event...but one thing I was not expecting was an award! I was recognized along with two others for my service in "State Activities." If you have been reading this blog for a while, you will already know I am also an appointed member of the Board of Directors for the California Association of Realtors, and in 2013 served as the Vice Chair of its "Communications Advisory Committee", and a member of a few other committees. It was a lot of work, but VERY important work that I take very seriously. So it is very nice to be appreciated for those efforts. For 2014, I will be the "Transaction Tax Issues Chair" on the "Taxation and Government Finance Committee" for C.A.R. I'm excited to take that on and be on the leadership of a policy committee. Cheers to a great 2014!

New Listing - 2237 Eastwood Drive, Roseville, CA 95747

Welcome to Fiddyment Farms in Roseville! This gorgeous 4 bedroom + loft, 3 bathroom, 3,062sf Shea Home was the former model home for "The Maple" floorplan. You'll love the open lay-out, amazing kitchen with pantry, island, granite slab counters and backsplash, formal dining room, separate living and family rooms, downstairs bedroom & bath, upstairs loft/bonus room, master suite with jetted tub, separate shower, dual sinks etc. $100k+ upgrades: designer light fixtures, natural stone, surround sound, pre-wired CAT5 ethernet, custom paint, central vac, flooring, landscape, etc. Parks, nature preserve, schools, shopping nearby. Dont wait! Offered at $459,900. More more photos and details, please visit 2237 Eastwood Drive, Roseville, CA 95747. Open house Sunday, January 5th from 2pm-4pm.

Low interior home temperatures = possible broken dual pane windows...

I have blogged in the past about the importance of doing a "Final Walk Through" in the past (aka, Verification of Property Condition). This photo should look familiar to you if you follow me on Facebook, Twitter, or Instagram. I learned something new last week! I went to a Carmichael home to do a final walk-through with my buyer clients, and we found a broken window. Uh oh! But upon closer look, we discovered that just the interior pane of glass was broken. How could this be?

Well, I soon learned, after speaking with a glass company, that something called "Thermal Shock" was likely to blame for this. Basically pressure builds between the two panes of glass, causing the interior pane to break. The seller had turned off the heating unit inside the house, during what will likely be the coldest week of the year with our overnight lows last week in the 20's. The average temperature inside dropped from about 70 degrees to the 40's, or lower. This photo was taken of the thermostat in the late afternoon...probably the warmest part of the day. I'm sure the interior temperature was much lower overnight.

So, the moral of the story is be careful if you decide to save a few dollars and not continue to heat or cool your home. Luckily the seller and listing agent were very apologetic, and agreed to fix the broken glass (the seller is contractually bound to keep the property in the same condition in which it was when the buyer first viewed the home), and my buyers closed escrow with no issues there.