Cider Press Hill

Zillow says....

I have been keeping an eye on Zillow.com over the past few months, watching the value of my house sink. It’s sort of depressing. I think Zillow is pretty accurate, though. The values they assign for my neighborhood seem to be where the local real estate agents (unhappily) think the values are. There is one house for sale in the neighborhood priced at early 2006 values and the real estate agent has tried to explain that the house is now worth about $50,000 less and the price should be lowered. The owners refuse, though. It is, obviously, not moving. It’s been for sale for about 7 months now, with no offers.

Also, unhappily, the woman across the street who bought her house in December of 2006, at the height of bubble prices, is now lamenting that her house is worth way less than her purchase price. We were talking a couple of weeks ago and she said she was confident that the house values wouldn’t drop too much more in this town and would rise again soon. Because? I’m not sure, other than wishful thinking. She thought this because this is a wealthy town and property here is always in demand. Well, maybe not so much these days.

Houses aren’t selling here any more than anyplace else—mainly, I think, because people aren’t yet willing to drop their prices to reflect the reality of a popped housing bubble. For people who bought houses here in the past 3-4 years, that’s not what they want to hear. Well, who does?

I do wish I’d sold my house last spring and tucked the cash away until the market bottoms out. I don’t enjoy watching the value of my house plummet, but, really, the 2006 heights were unrealistic and I always thought people were insane to spend that much on these houses. On the other hand, if someone had been insane enough to buy my house for 2006 prices, I surely wouldn’t have objected.

I bought my house in 1994 just at the tail end of that recession and the New England housing bust. I was in the right place at the right time and I bought my house from a developer who was going bankrupt and trying to unload his properties at fire-sale prices. I am ever so thankful.

Watching my house increase in value more than 3 times over the purchase price was surreal, though exciting. That’s just not normal, though. Now I get to watch the value drop even faster than it rose. My house appears to be losing around $2000-$3500 in value each month, some months reflecting more loss than others (three months ago it was $10,000). I’d like to see that slow down a little bit soon, but I have my doubts. I’d also like to see my property taxes decrease along with the value of my house, but I’m not holding my breath. If the town did that, we’d be bankrupt and the schools would have to close.

I wonder about the people who live up on the hill behind me. Unless they fell into a huge sum of money (inheritance?), they’re probably reassessing the wisdom of tripling the size of their house and adding ornate landscaping (fancy stone terracing, for example). I’d guess they probably did what a lot of other people did—cashed out equity with a home equity line of credit. They’ve been adding on and making other improvements for about 3 years. They do have a beautiful house now, but will the value of their house support the debt on it in another year? Good question. How many people are in that same boat across the country? And should interest rates ever rise, which they eventually will, what will happen then?

This will just get uglier and uglier for a long while. Where it will end will probably not be good for any of us. And when that happens, I’d like to think that those who are the most responsible for this mess would meet karma up close and personal. (coughalangreenspancough)

In the end, I think we’ll all be reminded, in terms we will never forget, that houses are just places to live and the total mortgage debt needs to bear some close relationship with income rather than the house’s speculative future value and super low interest rates. That concept has surely been out of whack for the past few years.

Posted on 03/25/08 at 07:37 PM
 




Linkmeister

I dunno.  Zillow continually has our house valued really really high (the one across the street is at $1.06M, and we’re not far behind), and I can tell you that once a buyer got inside the offer wouldn’t be too close to that.  Not that we’re slobs, but there are a lot of things we’d like to do to this house that we’re not doing.

United States   Posted by Linkmeister on 03/26/08  at  02:34 AM





Kate

Has Zillow shown any drops in value for your neighborhood yet? I don’t know that they are accurate for every house, but they seem to be picking up the general trend. I’d need to do a few things in my house, too, to get the top price for it (excluding granite counter tops, of course). But, in general, I think their trend line is spot on for my neighborhood. It is disturbing to see the values falling so fast, though.

United States   Posted by Kate on 03/26/08  at  03:03 PM





Linkmeister

I haven’t looked at it frequently enough to determine a trend.  I imagine you could do a good chart if you measured, say, every Friday (after the Sunday Open Houses have had time to percolate).

United States   Posted by Linkmeister on 03/26/08  at  07:33 PM





cyn

I hadn’t checked Zillow in a year - last time the value of our house was in the high 700’s--not so right now!  Down a lot since then.  Good thing I am not having to sell, I would not be happy.  Luckily we have the luxury of time and no mortgage so when times are good again, we can go for it.  Until then, we sit.....  Tell you waht Linkmeister, I’ll swap with you!!  My dream home is near my best friends on Oahu--they live on Aalapapa Drive and the house I fell in love with is just a little bit down the road--has a tiny ocean view and the most wonderful lanai!! ;)

United States   Posted by cyn on 03/26/08  at  10:39 PM





Linkmeister

cyn, we’re a mile above Pearlridge, with a nice view of Pearl Harbor and the Arizona Memorial.  From the back deck you can see Diamond Head.

Aalapapa Drive?  Kailua, huh?

United States   Posted by Linkmeister on 03/27/08  at  01:59 AM





cyn

Yup!!  Have you ever eaten at a cute little sandwich shop called Pepper’s Place in Kailua-town??  If so, then you were at my best friend’s place!!  It’s right in the heart of Kailua--in fact, we have our name in for new condos going in just a little bit away from Pepper’s..it will take a huge dive in RE there and a huge surge in RE here for my dream to become a reality, but......

I know where you live too.  We have driven all through that whole area--some times on purpose and a couple times when I got lost!! ;)

United States   Posted by cyn on 03/27/08  at  10:35 PM





Linkmeister

What? Drive all fifteen-twenty miles over there?  Over the Pali?  Are you nuts?

Grins.  That’s what people on my side of the island say a lot.  It’s idiotic but true.  I haven’t been on the Windward Side in years; I’ve had no particular reason to go over there, but one of these days I’m going to take Mom on a circle-the-island drive.  We haven’t done that since our last batch of tourist buddies visited before Dad died in 1993.

United States   Posted by Linkmeister on 03/28/08  at  02:30 AM





cyn

You are too funny cause it is true.  The first time I went to Oahu, I ran away from home (laugh) and went on my own to stay with my friends and drove all over the place.  The next time I “invited” my husband along (he now loves it as much as I and feels as deprived as I do when we don’t get there!).  Anyway, I took him on a circle the island drive his first time there - our friends who have lived there for 20+ years were shocked.  ALL THAT WAY!!  In the same day??  Since then we have done it many times and they still laugh.  Of course, to us, it is just down the road apiece.........;) Well, go around and stop at Pepper’s Place in Kailua Town, have one of their famous steak and cheeses and say hello to Carol and John from me.  Hopefully I will be back there the end of June! 

Sorry Kate for using your blog to visit with Linkmeister!!

United States   Posted by cyn on 03/28/08  at  11:19 AM





Kate

I’m enjoying it, Cyn, carry on! I love hearing about Hawaii. Wish I was there!

And I didn’t know that Linkmeister had a view of Pearl Harbor and the Arizona Memorial from his house. Pictures, Linkmeister! Serious envy, here!

United States   Posted by Kate on 03/28/08  at  02:57 PM





Linkmeister

Actually the Pearl/Az Memorial view is best driving down the hill.  My neighbor’s got whacking big trees. wink

United States   Posted by Linkmeister on 03/28/08  at  03:06 PM





Kate

Time to get out your chain saw. ;)

Even if you can’t see it directly, you don’t have to go very far to see it. Or Diamond Head.  For someone stuck in the frozen tundra, it sounds even more like paradise than normal. Just for the heck of it...what’s the temp there today?

United States   Posted by Kate on 03/28/08  at  03:10 PM





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