"You can’t trust the Zillow value..." I hear this from my fellow agents. I say it to sellers, and it’s true that you cannot rely on a Zestimate alone to determine an asking price for your property. How would Zillow know if you recently put in gold plated bathroom fixtures while your neighbor’s place still has the same harvest gold shag carpet circa 1970? Unless they have x-ray vision, they couldn’t possibly know! So how could they account for so many unknown variables when determining a likely value? They couldn’t! But hear me home sellers, buyers DO look at Zillow values before making an offer, so you ought to correct any erroneous information Zillow may have and try where possible to get a fair Zestimate.

How does Zillow determine the Zestimate? Zillow incorporates information from many sources. They look to any recent transfer of the property, transfers of neighboring properties, size, bedroom count, type of heating, view, your tax assessment, and other factors. Their algorithm can actually be quite accurate, as I’ve noticed in recent months (always AFTER I do my own analysis, by the way). In other instances they can be wildly off the mark. My own house has a Zestimate fully 51% under what I paid a few years ago. Not even the most pessimistic analysis of my neighborhood shows a decline that steep. Okay, okay… most people have a tendency to misjudge the value of their home, and they are usually NOT low in that estimate. It is possible I am guilty of this to some extent, but as a real estate agent who is out there every day looking at homes, I am in a very good position to spot whether it is wildly off, and I believe that it is. What can I do about it? Well, here is what I am trying to do... I claimed ownership of the house on Zillow, then I adjusted a few things such as bedroom count, square footage, view, and heating type, all of which Zillow had wrong. My Zestimate didn't change, but I understand it can take six weeks to see any correction. If this doesn’t work, my next step will be to “report a problem” and lay out the reasons why I think they are off base on this one. I don’t know if either step will bring results but I will monitor the situation and report back to you.

I put together these sales ratios the other day. (Sales Ratios Explained) What I found striking was the lack of sales activity over $350,000. With interest rates around 4 PERCENT and great inventory to choose from, what causes this? I will tell you a theory my brother Matt just shared with me. Matt says buyers of homes over $350,000 tend to be homeowners already; they are not first time buyers, as a rule. So these buyers have a house to sell. With values down, they may be in a low or negative equity situation. In any case, coming up with a down payment could be a trick, as most people use the equity they once had. Most are NOT sitting on a pile of cash, especially in this economy. Also, it is possible these people are of an age where they follow the news more closely. They see volitility in the stock market and absorb a lot of the negativity that makes news.

What will turn this around? Great question. Good economic news will help. As people gain confidence, some of them will enter the market. One good piece of news is that savings is up and many consumers have gotten a handle on revolving debt. Savings may also prove to be a solution in another way--providing buyers with a down payment.

We are enjoying our new office space on the lower floor of Windermere on 19th and Orchard. The timing was perfect. The summer selling season didn’t even start until after we were settled in. We extend our thanks to the real estate market for this courtesy. Things have picked up—the phone is ringing and offers are coming in again. Recent volatility in the stock market hasn’t cooled buyers off--quite the contrary. With the volatility came even LOWER interest rates than we’ve been seeing for the past few years--rates around 4%! That has buyer’s attention at last; that and the fact that values have finally returned to a level commensurate with incomes here in Tacoma. While we are buoyed by this sudden increase in activity, any optimism is balanced with skepticism. We have seen a few false starts to recovery—times when we thought depreciation was a thing of the past, only to watch the market shed a few more percentage points. It’s going to happen when it happens. This past week saw yet ANOTHER national story on how Tacoma will see the greatest recovery and price appreciation of anywhere on planet Earth. This time it was the Wall Street Journal reporting it, citing Tacoma’s diverse economy. Here’s hoping the prognostications prove true!

Enjoy the rest of your summer!

Kindest regards to you, our clients and friends,

Tom

A man I know at Sky Terrace Condominums sent me this. I had been curious about all of the construction on the building and thought maybe others were as well. He also talks about Stadium Way improvements. Promenade should be cool. I'm copying and pasting what Paul sent directly:

AUGUST 3, 2011

WHAT’S GOING ON AT SKY TERRACE, 235 BROADWAY, TACOMA?

The scaffolding covering the building is the first construction step in a four-month
project to make our 38-home condominium the most up-to-date in the area.

1. The building is being completely repainted in pleasing contrasting tones.
2. Solid glass deck railings topped with white hand-rails will replace all the
old metal handrails on the Stadium side terraces.
3. New floor entry tiles with colors matching the new building color tones
will replace existing tiles in the Broadway front entry.
Coincidentally we expect another city project will remove the huge tree
blocking tenants’ view of our mountain.

For almost a year, starting in January, 2012 the city will remodel Stadium Way - the entry to our garage.
• The street will be reconstructed and resurfaced from I-705 to Division Street.
• A traffic light will be installed on our corner (at 4th street) to reduce car speed
using I-705.
• The bay side of Stadium Way will be made more people-friendly by adding a
promenade including a bicycle lane and walkway cut-outs with benches for
lounging and enjoying our views.

As if these improvements were not enough to make our homes unique in Tacoma,
the condominium is studying plans to be the first in Tacoma to provide EV owners
an electric recharge unit in their garage car stall.

Dan Hannah and I took a test drive of the new EV Leaf last week. It was amazing!
We’d like to share that experience with others. We’ve arranged:
Nissan Inc. will provide a Leaf EV (Electric Vehicle) demonstrator car for all those
wishing to take a test drive the afternoon of August 10th from 4pm to 6pm.

You’ll learn from qualified Nissan folks how their new EV cars:
• Don’t use any gas
• Have no tail-pipes and
• Produce no emissions
Just make a reservation for your test drive:
Email: PaulFrankenberg@gmail.com or leave word at T: 253 759 9988

During the CAFÉ mileage hearings in D.C. last week, one car executive admitted:
“I’ve never seen such public awareness of new technology as we’ve seen in the
last 120 days for Electric Vehicles”. This is not a technology change like we saw
with the acceptance of computers. Computers were new. We never used them.
We had to painfully learn slowly. Everyone who owns a car already knows how
to use them. There is no learning delay.

Those looking to reduce our dependence on imported oil and gas understand this
issue better every day, too!

Recharge units are being installed by the city, state and FEDs so the concern of
running out of power will be largely eliminated by year-end. Chargers will be
installed from B.C. to Mexico. Cross country, and east-west also need to stay
competitive. Many, many companies such as hotels, malls, restaurants,
filling stations, schools and parking lots all want their share of this new business.
The public-private sector is alive and well.

This life-style change is not going away. I hope many Tacoma folks will take this
chance to start learning what it means:
• For lowering your car operating costs,
• Reducing use of imported oil

Make a reservation for your test drive:
Email: PaulFrankenberg@gmail.com or leave word at T: 253 759 9988