First lets get something straight.  Selling a house and formulating a market price (value) for that home is not like selling a seat on a plan.  A majority of the seats on a plan are the same, except for first class and business, but in reality it is just a seat that carries more service.  So buying a seat on a Delta plan is the same as a US AIr, American or South West.  Just some carries can sell them high and low. 

Now when you go on line to do you plug in the option for that plane seat, leather, vinyl or cloth? germ free or a germ factory, isle or window, and now you can’t get the exit row because they ahve to make sure you are physically fit to sit there.  And they are charging you extra for the leg room.  Ok you get the point.

Zillow gets its information from county tax records.  Public information that is available and they put it in a nice neat format that everyone like.  Color, graphs and all the zestimates you can handle. 

Here is what is uses:

recent sales data in the area, square footage that is in the tax records (most likely wrong), the last sales amount and then they come up with a square foot price.  SP/SF = $PSF price. 

Now if it were that easy to price out a home then every 13 year old computer geek would be in business and the Real Estate agents would be looking for another career path.  Zillow makes it look good but the numbers are all WRONG. 

Example:  A large upscale home in Richmond, VA was listed for $1,295,000 in the MLS.  (assessed value with the county is $1,305,500). After several agents, and multiple price drops and over a year to sell it finally closed for $730,000.

If I were the neighbors I would be pissed.  Most of the homes Price Per SF solds is around $200.00- $215.000.  That is a HUGE drop to $92 sold SF.  You might be thinking short sale, foreclosure, steel, deal of the century or the house needed a ton of work.  Actually not.  The house was in excellent condition and solid custom construction of a home.  But why so CHEEP? 

You wont find that answer on Zillow.  Because it can’t compute the factor the house was purchased for $730,000 and a house trade of $561,000.  Technically the home sold for $1,291,000 but you would never know that by looking and relying on Zillow number. 

I believe in Santa and the Ester Bunny before I believed everything I saw on Zillow and you should too.  Consult a REALTOR and get the truth behind the numbers. 

2011 has been a very difficult year to so many folks out there.  The economy still stinks, Washington can’t stop with the gamesmanship, both the NFL and the NBA had lockouts, and gas prices are still above $3.00 a gallon.  Hey other than that what else could happen?

Well maybe 53 degrees and rainy on Christmas Day. Oh well no white Christmas and Santa rides this year.

So, How you doin? Well we did pretty well.  I still have a job, my son is at Collegiate and my wife is the best.  The real estate market in Richmond, VA went pretty much as expected in 2011.  A better year than 2010 but we are still not out of the woods yet.  What I am thankful for is all the family, friends and referred clients that bought a house this year and I was able to assist in that process.  I am always so appreciative for the opportunity to work with so many NICE people who make my job much more gratifying.  Helping buyers and sellers reach their goals one home at a time.

So here are my Top 10 in what I am thankful for in 2011 hopefully this will spur you on to reflect back on what made your 2011 a success.

1. My health
2. My family, Cyndi, Drew, Woody and Jake
3. My Mom and Dad
4. My in-laws.  Yes my in-laws.  I am blessed with two sets of grandparents for our son that bring so much to the table.
5. My two older sisters and their kids.  One swimming at Princeton, one at Stanford and the youngest at Collegiate swimming and playing tennis.  Way to go!!
6. My friends – all of them and you know who you are near and far.
7. My kindergarten teacher Betty Hotchkiss, who I had in 1970 and also taught my son Drew in 2010.  WOW is right, and how lucky is that.
8. The ability to coach tennis and work with great high school kids in the spring.
9. Able to para-sail with my son, walk on the beach with my wife and pick crabs for dinner.  Yummy
10.  Able to play golf with my Dad who is 86 years old.

HAPPY HOLIDAYS AND HAPPY NEW YEAR FOR 2012

]]> http://wesatiyeh.wordpress.com/2011/12/23/twas-the-night/feed/ 0 wesatiyeh Image http://wesatiyeh.wordpress.com/2011/12/08/sellers-overvalue-their-homes-worth-study-finds/ http://wesatiyeh.wordpress.com/2011/12/08/sellers-overvalue-their-homes-worth-study-finds/#comments Wed, 07 Dec 2011 21:28:03 +0000 wesatiyeh http://wesatiyeh.wordpress.com/?p=957 ]]> Sellers Overvalue Their Home’s Worth, Study Finds.

About 76 percent of home owners believe their home is worth more than their agent’s recommended listing price — that’s up from 73 percent last year, according to a new survey conducted by HomeGain of real estate professionals and home owners. 

On the other hand, 68 percent of home buyers say homes are overpriced, with 32 percent saying homes are overpriced by more than 10 percent. 

“Home buyers and sellers continue to remain apart as to home valuations with the vast majority of home owners thinking their homes are worth more than their agents and the market are telling them,” Louis Cammarosano, general manager of HomeGain said in a statement.

Source: “Three Quarters of Owners Continue to Overvalue,” RISMedia (Dec. 6, 2011)

Inflation is a hidden tax.  The government’s ability to print money and the subsequent inflation results in lower purchasing power for consumers – just as if direct taxes were imposed.

In the past 30-years, prices of just about everything have risen.  The first table below shows that college tuition expenses in particular have been skyrocketing.  But what can we expect over the next 30-years?  The best guess is that inflationary pressure is likely to be lower in the next 30-years as compared to what it was in the past 30 years.  Today, the central banks around the world (with the exception of Venezuela, perhaps) clearly understand that inflation is a headache for the economy that distorts resource allocation and slows economic expansion.  So there will not be irresponsible printing of money to pay government bills.

However, there are very large budget deficits around the world.  These deficits force the government’s hand in printing money.  Even though the central bank is an independent entity of the nation’s treasury departments in the U.S. and other industrialized countries there will always be public pressures to help finance government spending via freshly printed money so as to avoid deep spending cuts or hefty tax increases.

Moreover, countries that do not need to print money (because of, say, a balanced budget and a speedily growing economy) at times are forced to print money in order to keep their currencies stable in relation to other foreign currencies out of fear of losing export demand. For example, America prints money which would weaken the purchasing power of the dollar.  A weaker U.S. dollar in turn will mean more expensive price on Chinese-made products for U.S. consumers.  But China does not want that to happen and hence is forced to match the U.S. by printing its own money in order to keep the Chinese currency at the same proportionate power.  It becomes the battle of printing presses – in just about all countries.  Even Switzerland, historically very cautious of printing, announced a few months ago that it will not stand idly by and let the Swiss franc dramatically appreciate in value in relation to other currencies.  Another equally plausible alternative scenario for the future, therefore, is for higher inflation in relation to past rates.

The tables below show the alternative inflation paths.  Sending kids to college looks like it will be tough.  Home price and housing wealth could either double or triple in value.  Note the ‘magical’ anti-inflationary power of the 30-year fixed rate mortgage for homeowners.

Here are current rates for purchase loans on single-family homes greater than $150,000 with 20% down and 740+ credit scores . Please call for rates on refinances.

Conf 30 year fixed to $417,000: 4.0%
Conf 15 year fixed: 3.25%
Conf 30 year fixed ($417,000-$535,900):  4.0%
FHA 30 year fixed:  3.75%
FHA 5/1 ARM:  2.75%
Jumbo 30 year fixed ($528,750+): 4.25%

All rates reflect 1 origination, 0 discount points. Please note rates do vary by credit score, loan amount, rate lock period, occupancy and loan to value.

Here’s what made the list:

Leesburg (#24 best housing market since 2009)
Sterling (19)
McLean (13)
Chantilly (11)
Reston (9)
Ashburn (8)
Herndon (6)
Vienna (5)
Burke (4)
(No Virginia city made the list of 25 worst markets since 2009 — Florida pretty much owns that.)

Virginia Home Sales Report 3rd Q 2011     click for the full report