Home Value Falling $1k/Week
So this morning I was updating my 2008 Goal percentages on the sidebar and it’s become rather apparent that my streak of positive gains in respect to net worth is going to come to an end this month.
That’s okay by me. As long as the debts continue to fall.
We did, however, spend a boat load of money this month… and there is still another week to go?!
The $1k+ spending spree last weekend can technically be cancelled out by the ecomonic stimulus check that arrived at the beginning of the month, so that’s not the reason for the pending negative report.
The plumbing repair wasn’t an expected expense, but it also wasn’t so large that it should have made a big dent.
And the vacation reservations we’ve been making aren’t really to blame either (though without them, I do believe I could still squeak out another positive month.)
It wasn’t that long ago when I said that I wasn’t feeling any effect from the housing crisis we keep hearing about but what really killed me this month was just that — the value of my home.
The Zillow.com zestimate value of my house has been plunging around $1000 each week. Not cool.
As of this morning, it’s down another $500. Down $4500 for the month. I’m not 100% certain how the zestimate is calculated, I’m too lazy to look it up, but I have a feeling it has something to do with recent sales and listings of comparable homes in the area.
Usually I’d agree that that would be a pretty safe way to guesstimate the value.
Thing is, while killing time looking at the local listings on Realtor.com a few weeks ago, I came across a home not too far from me. Walking distance, actually.
Same age, same style, and almost the same size too, but what really caught my eye was the listing price. $119k. Wow. That’s cheap.
That night, I did a drive by to take a better look, thinking the list price was a typo. $191 would be more accurate I thought.
So, after driving by two or three times, nice and slow, I noted its faults (in comparison to my house)…
It’s on a busy road, it doesn’t have a garage, and though the lot is about the same size as mine, it’s one of those long skinny ones — very little curb. It also needs a *ton* of work on the exterior.
Hmmm… Maybe $119k was a fair price (actually a bargain still, if you ask me). But when I thought about it some more, the way Zillow would factor in its listing price to my zestimate, it all made sense.
By the measurable numbers, my house is essentially the exact same as this one. Lot size is roughly the same, square footage is within 50 feet, and they’re both X-form gabled ells built in the late 1800’s. On paper — we’re the same house.
That can only hurt the Zillow value of my home.
But at the same time, it makes me feel okay about the value dropping.
The zestimate is just a gimmick guideline anyway — I know its actual value, while obviously falling, isn’t falling as fast as they’re making it out to be.