Monday, January 19, 2009

Finding the Best Sales Comparables

As the market changes, we need to find the best sales comparables possible, in order to analyze market trends. The best comparables are found using the Case/Shiller Method, whereby the same house sells two or more times. Occasionally you may find this in the "see all home info" section on Zillow, where it lists past sales history. If this is not available, then we can:

1) Check the most recent sales on Zillow by typing in a zip code desired
2) Click on the building icon that has your desired zip code
3) Show a list of homes for sale and hit the comparable sales button for a property
4) Arrange the sales by date, by clicking on date sold, from most recent to the oldest
5) If possible, find homes on the same block or within close proximity of the most recent sale
6) Look for similar room count, year built and size
7) Check for similar lot size
8) Compute the change in price over the time elapsed

Last but not least, find your Meltdown Neighborhood Section on this blog and post your results!

7 comments:

Anonymous said...

Redfin usually has the house sales history as well.
Plus I trust Redfin more than Zillow when searching for homes. Zillow has always over inflated the value of homes. I believe this is why Arizona banned Zillow.

latesummer2009 said...

I don't reccommend using the Zillow Estimates, but the recorded sales are good. Also, Redfin is another excellent source for comparable sales.

Anonymous said...

Okay you big crybabies, sky-is-falling...

Here are the numbers for 2008 home sales in SM vs. 2007....I took out the condo sales numbers because no one cares about that stuff...

Santa Monica/90402
103 houses sold

$2,550 avg. sales price

-9.9% decrease

$1,027 SF


Santa Monica/90403

22 houses sold

$1,843mm avg. price

22.8% increase

$1,006 sq. ft.

Santa Monica/90404

14 houses sold

$830m avg. sales price

2.2% increase

$754 psf

Santa Monica/90405

72 houses sold

$1,100mm avg sales price

-13.7% decrease from 2007

$800 per sq. ft avg.

latesummer2009 said...

Those are median sales prices not average sales prices. Also, it is hard to believe that 90402 and 90403 now sell for the same price/per sqft....

Anonymous said...

Median is a good-enough indicator. Otherwise you can *always* prove a "meltdown" situation with odd-number sales.

This data represents my neck of the woods pretty well too. 90045 while lower, has two bank repos priced at $500,000+. Absurd.

News-update: the sky isn't falling.

I'd be quite happy to see the meltdown, but I don't think it's happening in the Westside.

latesummer2009 said...

I think you meant 90405 (Santa Monica) instead of 90045. (Westchester) Where are these REOs at $500K?

Westside in general, has corrected 10-20% already, but, the larger cuts will come in the next couple years.

Anonymous said...

may already know this but, using redfin/zillow you can't tell if a sale was just a bank trustee auction or actual sale. get free login for propertyshark.com, it shows actual sale records and nice comparables search. (only allowed so many reports per day though, with free login)