Your Home Valuation Is Wrong

Do not make any major decisions based on an online, automated home valuation. You could lose a lot of money. A lot.

How does a $60,000 loss on a $300,000 home sound to you? Ridiculous? Read on.

Of course you are going to look up the value before you make an offer on a home, or prior to selling your current place. Just remember, that number is almost guaranteed to be wrong.

If you make life-changing decisions based on bad information, then you’re jeopardizing your future.

How can I be so sure the information you get online isn’t correct? Because it is statistically unlikely, and most of the sites will even tell you so, in the fine print.

Does it matter which site you use? Not really. Some are better at guessing than others, but they all vary dramatically.

When determining value on a property I typically check ten different online valuation sites. Not because I think they “know” what the home is worth, but because the seller and potential buyers are checking these sites, and it’s better to know in advance what disinformation they are consuming.

Those values are all over the map!

For example, a home with a true market value of $300,000 might have automated valuations ranging from 225,000 to 375,000. That is a large margin of error!

What about the infamous Zillow Zestimate? This is the margin of error stated on their website as of July 26, 2018:

  • Nationwide, Zestimates are currently within 5% of the final sale price 52.9% of the time.
  • In the U.S. as a whole, Zestimates are currently within 10% of the final sale price 73.3% of the time.
  • Nationally, Zestimates are currently within 20% of the final sale price 85.8% of the time.

Let’s put this into real world numbers using the $300k actual value example.

Just over half of the time (52.9%) the Zestimate is within $15,000 (5%) of actual final sales price. That could be high or low, so a $30,000 swing from 285,000 to 315,000.

The Zestimate is within 10% on another 20.4% of homes. That means a $60,000 swing from 270,000 to 330,000. If the buyer believes the real value is 270,000 and the seller thinks it is 330,000… well it’s easy to see we now have a significant problem.

Another 12.5% of homes are within 20%. That produces a $120,000 range of value from 240,000 to 360,000! That is 40% of the actual value! You don’t want to make any decisions based on this information!

Zillow admits they are not even within 20% (high or low) on 14.2% of homes nationally.

Do you want to guess which group your Zestimate falls within? It’s a roll of the dice!

If you’re in the 52.9% group you could lose $15,000.

If you’re in the 20.4% group you could lose $30,000.

If you’re in the 12.5% group you could lose $60,000.

If you’re in the 14.2% group you could lose even more than that!

The last two groups comprise 26.7% of properties. That means you have a greater than 1 in 4 chance of losing $60,000 or more if you base your buying or selling decision on the information you obtained from the big gorilla of real estate data online.

This is a multi-billion dollar company that draws millions of people to the website each and every month. And I have the nerve to warn you against believing what you see in black and white on that website? Yes. That website and dozens of others. Pay attention.

The actual Zestimate, not the range of possibility, the actual published number on my personal residence has gone up and down over the last year $59,000. That is absurd. Home values don’t rise and fall with the wind, like the stock market.

Side note: Facebook stock is down 20% today. Your home doesn’t go on a roller coaster ride every month.

These robot valuations use raw sales data available from public records but they have a huge disadvantage: They have never been inside your home.

They don’t know if the flooring, kitchen cabinets and roof all need replaced, or if they were just completely updated. They can’t see the view; they don’t know if the comparative sales were well cared for or not; they can’t tell if the home next door is an eyesore or worse; they can’t hear the traffic from the highway that decreased the selling price on three of the comparable sales they are using.

The bottom line is you need a trustworthy professional to give you good information.

Contact a full-time, experienced and knowledgeable professional whom you trust to give you good advice so you can make the best decision for your family.

http://www.SweatSellsFlorida.com

All the Best!

Jim Sweat, ABR, CLHMS, CRS, CDPE, GRI, e-PRO, ILHM

Featured in Scene Magazine’s Men on the Scene 2016 issue

Author of REAL ESTATE CSI: CONTROVERSY, SECRETS, INSIGHT (coming soon)

Jim Sweat – Helping Buyers & Sellers Choose Wisely Since 1995 ™

Re/Max  Alliance Group

Mobile: 941-306-7384

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All-Time Record-Breaking Home Sales in Sarasota & Manatee Counties

Real estate experts predict that more existing homes will sell in Manatee and Sarasota counties in 2015 than during any other year in history.

And that is in a market with low inventory levels!

On a pace that the president of the Realtor Association of Sarasota and Manatee calls “historic,” Sarasota County is expected to exceed an all-time high of 11,550 home sales by year-end. In Manatee County, sales need only average 360 per month in November and December to break an 8,004-sales record set in 2013. Nearly twice that number sold in October.

By the end of October, the pace of sales had dropped only modestly during the autumn selling season, which is historically viewed as being “slow.” At the same time, median prices are near a five-year peak and homes are typically staying on the market a little over a month before selling.

Excerpted from article  published November 30, 2015. Written by Matt Johnson, Bradenton Herald business reporter.

Strong demand is pushing prices up substantially. That trajectory may slow as more sellers put their homes on the market, but with the number of homes for sale at or near a half-decade low, some buyers are jumping in while properties are still available where they want them at the prices they want to pay.

Housing inventory has been well below the six-month level of supply that defines equilibrium between buyers or sellers.

In October, the supply was between 3.5 and 3.9 months across the single family and condo markets in the two counties.

Higher prices, low inventory and rising interest rates may temper the sales pace next year, but all indications are the all time sales record will be broken this year.

 

Landfalling Hurricane Map

Florida has gone over ten years without a hurricane landfall. Wilma was the last one in October, 2005. That is even more incredible when you realize Florida has 1,350 miles of coastline around the Gulf of Mexico and the Atlantic Ocean.

This map shows some “pockets of concentration” where hurricanes seem to funnel in with regularity.

There are numerous theories as to why Southwest Florida, and Sarasota County in particular, have been so fortunate. Knock wood, throw salt and cross your fingers that I don’t jinx it by mentioning some of them!

One theory is the Continental shelf and depth of the Gulf near Sarasota. Another is the effect of the Jetstream. But the most commonly quoted reason is legendary.

This is an excerpt from a Sarasota Herald Tribune newspaper story June 18, 2007:

The story goes something like this, with the emphasis on “something.”

Sarasota is protected from hurricanes because the American Indians who once lived here knew it was a safe place, which is why they decided to live here.

Or, the American Indians who once lived here blessed this place and made it safe from hurricanes.

Or, the ancient American Indian burial grounds scattered throughout the county are keeping the storms at bay.

Sarasota has not been a bull’s-eye for a major hurricane since reliable records began in 1871.

But it was damaged to varying degrees by hurricanes in 1926, 1944 and 1950, as well as Donna in 1960 and Charley in 2004.

A number of other explanations for the relative safety have surfaced, most of them questionable.

One gives credit to nature’s fortunate placement of dunes off the coast.

Another, to the magic powers of Siesta Key’s white sand beaches and underwater crystals.

Whatever the reason, we are just glad to be fortunate and able to live in such a beautiful place!

I am all for being lucky!

Respectfully,

Jim Sweat, ABR, CRS, CDPE, GRI, e-PRO, ILHM

REALTOR

Author of REAL ESTATE CSI: CONTROVERSY, SECRETS, INSIGHT (coming soon)

American Realty of Venice, Inc.

700 W. Venice Ave

Venice, FL 34285

941-484-8080

http://myfloridahomesmls.com/JimSweat Home search

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https://www.zillow.com/reviews/write/?s=X1-ZUyz3incawqo7d_93ahq Zillow

Local Realtor offers to pay you so they win next time! Coastal Living ranked Venice America’s Second-Happiest Seaside Town 2015.

Local Realtor offers to pay you so they win next time! Coastal Living ranked Venice America’s Second-Happiest Seaside Town 2015..

How Many Million Dollar Homes Sell Every Day in the Tri-county Region of Sarasota, Manatee and Charlotte?

How secure is it to purchase a high-end home in this southwest Florida area? Let’s take a quick look at two of our local islands, and then the numbers for each county.

In the last 12 months, there have been 25 closed sales on Casey Key. All but three of them were for over a million dollars. The average sale price was $2.62M, the median was over $2M.

Fifty three single family homes, on Siesta Key, over $1M, on the waterfront sold in the last 12 months (more than one per week). Average sale price was almost $2.6M; with the median at $1.8M.

When I expand the criteria to all sales on Siesta Key for $1M or more, there are six with accepted offers, averaging almost $2.4M asking price; seven are pending with average list price of $2.15M; and 78 sales have closed, with an average selling price of $2.25M. That is 1.5 sales per week, pretty strong demand for million dollar homes on just one barrier island in Sarasota County!

When I proceed to pull the statistics for all of Sarasota County, it confirms that there is a robust market in the $1M and up price range.

Thirty one homes are active with contract (accepted offers in place) with an average list price of $1.72M. Seventy five homes are pending, with an average list price over $2.3M.

395 homes have sold for over a million dollars in the last 365 days in Sarasota County! More than one per day, with an average sales price over $1.9M. The average days on market is 183 in this price range, so it may be a stretch to call it “brisk”, but 395 closed sales is certainly proof of a strong and healthy demand for high end homes in the Sarasota area!

Manatee County has five homes AWC – active with contract, averaging $1.8M; eighteen are pending, averaging $1.74M; one hundred twenty three (123) homes have sold averaging over $1.5M.

Charlotte County is smaller and has six high end homes with accepted offers (AWC) that average $1.59M; ten are pending sales averaging $1.64M; twenty homes have sold with an average sales price of $1.57M.

Total sales for million dollar homes in the Tri-county region are 538; average is almost 1.5 sales per day. So, how secure should someone feel about buying a high end home in Sarasota County, Manatee County, or Charlotte County?

Five hundred thirty eight sales indicate a lot of millionaires are interested enough in our area to put some serious money into real estate here.

Here are some additional things to think about.

Even though the experts were wrong about how quickly interest rates would go up, they will eventually rise beyond the historic lows we have been enjoying. A boost to our area is that property values have been increasing in most of the country, and that will allow many folks who were waiting to regain their equity, to sell up north and move to Florida.

Thousands of baby boomers retire every day, and many of them have spent their entire lives dreaming about owning a home in Florida so they can escape the cold that makes their bones ache!

It isn’t just homes that are selling. When you follow the money, you end up in the Tri-county region.

Last month, Publix paid more than $17 million dollars for the shopping center at University Parkway and Market Street in Lakewood Ranch. In the past year, it also acquired centers in Sarasota, Parrish, Englewood and Port Charlotte.

Publix is just one company that is expanding in the region. A lot of big names are investing heavily in SW Florida. The UTC Mall is the only mall that opened in all of the US last year. Many other big names have either just come to the area, or expanded in the last few years. I am working on an updated list of businesses that have opened commercial locations recently.

I feel good confirming that there is such an active high end residential market, on top of the massive investment regional and national companies are making in our area. This all bodes well for the future, and proves that a lot of smart money is flowing directly into the Sarasota County region.

Follow the money, it leads to Sarasota!

Sales data compiled from the My Florida Regional Multiple Listing System for 3-18-2014 to 3-18-2015.

Respectfully,

Jim Sweat, ABR, CRS, CDPE, GRI, e-PRO, ILHM

REALTOR

Author of REAL ESTATE CSI: CONTROVERSY, SECRETS, INSIGHT (coming 2015)

American Realty of Venice, Inc.

700 W. Venice Ave

Venice, FL 34285

941-484-8080

http://myfloridahomesmls.com/JimSweat Home search

www.linkedin.com/in/jimsweat LinkedIn

https://www.zillow.com/reviews/write/?s=X1-ZUyz3incawqo7d_93ahq Zillow