David Rathgeber's

Factoids

Zillow was once reporting their Zestimate was more than 5% off about one-third of the time, making it worthless. But their published accuracy statistics improved dramatically in a very short time. Wonder how that happened? Their new "more accurate" statistics are limited to results on fewer than 5% of our area homes which are carefully selected. It is easy to make results look much better if you report only on homes for which you are accurate. This is called "cherry-picking" the data.

So Zestimates are still worthless, despite their publishing an impressive median error on their cherry-picked data set. Click here to see Zillow's new accuracy details which are worthless. However, it is not a lie: They believe their own bull excrement which led to a $1.5 billion inventory of homes they had to sell at a loss. That's why mortgage lenders still require appraisals.

Ever wonder about Zillow's main source of income? It comes from agents who pay them to be recommended. Cool?
Gyrations in mortgage rates affect home affordability much more quickly than actual home prices. For example, when interest rates went from 3% to 7% in 2022, buyers were looking at $300,000 homes instead of $700,000 homes assuming the exact same monthly mortgage payment. There is a world of difference between those 2 choices: Over 10 quantum levels of perspicacity.
Fixed-rate mortgages are rare outside of the United States. The rest of the world (ROW) runs on adjustable-rate loans, and when their central banks raise interest rates to fight inflation, mortgage payments increase for existing loans. Our great recession of 2006/2008 was caused by defaults on adjustable-rate loans. See bold comments for the real story. Fortunately, there are very few such loans in the United States today, but keep your eye on home values in other countries.
Washington, D.C. is the geographic center of our real estate market. If you move your home one mile closer, it will gain approximately 2% in value. If you move a $1,000,000 home 10 miles closer it gains about $220,000 due to compounding.
Over 95% of all homes are sold through the MLS. This means that the information entered into the MLS computer is critical. The listing agent is a home seller's connection to the buyer. Learn how to check your agent's computer literacy here.
An exhaustive study of home sellers who have had a series of different agents marketing their home, finds that in every case, it is the very last agent who finds their buyer. Sellers, save time: Identify and hire the last agent first and sell quicker!
Have some fun: The next time you hear some Wall Street guru talking about real estate on TV, email or call in with this question: When is your program going to have a group of Realtors advising what stocks to buy?
Virginia is a "deed of trust" state. The deed of trust simplifies and expedites the foreclosure process. This might explain why Northern Virginia's real estate market led that of Washington, DC and Suburban Maryland as we all emerged from the turmoil of 2006/2007.
Interesting: During the worst real estate market in many decades (in the mid-1990's) the average home price in the Washington, D.C. area was nearly constant, actually rising 2% for the 7 year period.

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