Ballpark Figures

Ballpark Figures
Online home values often come out of left field DECEMBER 2011

About the only online segment growing faster than Cyber Monday sales might be real estate search websites such as Zillow.com, Realtor.com and Homes.com. One reason for the huge gains in web traffic (the above three sites now draw approximately 50 million unique visitors per month - and growing) is the home-valuation tools many of these sites offer. Resources like Zillow.com's Zestimator have become the first place many consumers turn in order to gauge the value of their own home or one they're considering buying.

Online value estimators are certainly interesting and more than a little entertaining. But they aren't the best way (and, in many cases, not even a good way) to get an accurate picture of a home's market value. A recent article in The Wall Street Journal pointed out that online home valuation models can "veer off target with alarming frequency." And most of the websites themselves acknowledge the potential for inaccuracies.

For example, Zillow features an accuracy table that rates the site's pricing estimates for major metro areas on a scale of one to four stars. Chicago is a three-star market for accuracy. The site claims that 78% of Chicago-area Zestimates fall within 20% of the actual sale price, and there is an average margin of error of 7.9%. Of course, that's for the entire metro area. What do those stats tell you about the accuracy of price estimates in your town, your neighborhood or your block?

To put it another way, if your real estate agent told you that slightly more than one in five of their pricing analyses missed the mark by 20 percent or more, you'd probably go out and find yourself another agent. Which begs the question... Why not call your agent in the first place?

If Zillow can give you a "three-star" guesstimate of your home's value, then a full-service professional REALTOR®, who's working from up-to the-minute MLS data, walks through dozens of homes each month, and has knowledge of those homes that can't be found in the public record, is probably worth five stars at least!

Of course that's not to say these websites and their home valuation models aren't relevant. Full disclosure - @properties advertises on many of these sites because we do recognize their value to the consumer. Sites like Zillow, REALTOR.com and Trulia have invested millions of dollars in developing excellent search technology. And it's important to recognize that online valuation tools are new. Algorithms are constantly being updated, and the better sites encourage participation from their user communities to acquire more data on individual homes. Over time, online valuation models can only get better.

Ultimately, however, the best estimate of your home's value will come from a professional REALTOR®. And you don't have to be buying or selling right this minute to get that information. I'm happy to provide an informal estimate or a thorough comparative market analysis anytime - even if you're just curious. Just pick up the phone and call me, or send me an e-mail or text.

On a final note, let me take this opportunity to wish you a very happy holiday season and a joyous New Year. I value our continued relationship and I'm grateful for your support. If I can be of assistance to you, your family or friends in 2012, please let me know. And remember that I always appreciate your referrals.

A New Window of Opportunity

The lure of contemporary floor plans, custom finishes and upscale amenities drew Chicagoans to new construction in record numbers in the early 2000s. Now, as the market stabilizes, new construction has become attractive once again. In fact, today might be the best opportunity to invest in a new home for years to come. Here's why:

Below Replacement Cost - While land has gotten significantly less expensive, labor and material costs have not come down proportionately. That means many developers simply cannot build the homes they are selling today for the prices at which they're being offered.

See Before You Buy - Traditionally, one of the biggest obstacles to purchasing new construction was buying from a floor plan. However, almost all new homes on the market today are completed. That means buyers can see room sizes, touch finishes and experience views before making a decision – a luxury that wasn't available at the height of the market.

Locked and Low - Another obstacle that has been removed is interest-rate uncertainty. Buying new construction used to mean rolling the dice on where rates would be when your home was finished six to 18 months after you signed a contract. With today's move-in-ready inventory, buyers are virtually assured the lowest rates in history.

Tax Credit - The Federal Homebuyer Tax Credit (up to $8,000 for first-time buyers and up to $6,500 for move-up buyers) is available for new-home purchases as well as re-sales. With the April 30 contract deadline approaching, builder inventory gives new-construction buyers some added flexibility.

Cycling Out - Believe it or not, if you like the idea of owning a brand new condominium in downtown Chicago, the window of opportunity is closing. While 3,400 new condos were delivered downtown in 2009, only 1,200 will be finished this year. In 2011, less than 300 new condos are slated for delivery, and no new condominium deliveries are scheduled for 2012 or beyond.*

Buying or selling, new or existing, I'm here to help with all of your real estate needs. Contact me anytime, and please remember that I always appreciate your referrals.

*Source: Appraisal Research Counselors Downtown Benchmark Report

Growing Stronger

There’s been no shortage of talk about a challenging overall housing market, but through it all, @properties has grown consistently stronger, and people are taking notice.@properties jumped 25 spots on the “Real Trends 500” list and now ranks as the 55th largest brokerage firm in the United States. Also this spring, we appeared for the first time on Crain’s Chicago Business’ list of Chicago’s largest privately-held companies.The people and programs that have enabled @properties to become the largest privately-owned brokerage firm in the city in just eight years are also helping our clients buy and sell homes in a tough market. And we continue to grow new tools and techniques to give our clients an edge,like the just-released @properties Market Report. We’re also growing our space. This summer, @properties will open a new office at the corner of Damen and Cortland in Bucktown, one of the hottest neighborhoods in Chicago.So, if your plans include buying or selling real estate, I’m here for you and available; with the strength and resources of Chicago’s fastest-growing real estate company behind me.