Just to show you how insane and ridiculous housing prices are in
California today we present another
Real Homes of Genius.
Today’s wonderful specimen is a 588 square foot home located in prime country
USA,
Compton California.
Now as you can see from the picture this home is the epitome of security; no one can get in and no one can get out.
Whoops, I think that’s the definition for prison but anyways, you are getting a fantastic deal for less than $300,000!
Let us take a look at some previous sales data on this place:
Sale History
08/04/2003: $106,000
12/20/2002: $121,097
08/02/2001: $115,000
Hmmm. Okay, so we have stagnant prices for two years and now this home has tripled in value since 2003? Now let me guess, it must be the white security bars on the windows that caused this price jump. Aside from this “affordable” price on this wonderful investment property, what does Zillow say it is worth?
Value Range: $329,981 - $421,642. Bwahaha! Okay, so we have a home for sale at $294,900 that sold three years ago for $106,000 and has a current Zestimate range up to $421,642! What does this tell you? No one has a damn clue of the true value of housing in Southern California. You might as well ask for $1 zillion because nothing is rooted in economics anymore. This place would rent for $900 a month. The $100,000 to $120,000 range seems more realistic because at least you can make a case as an investment property rather than the $294,900 to $421,642 range which makes no sense at all. These numbers shouldn’t even be associated with this place. To ask for these numbers is like financing a Geo Metro with a $30,000 note. The range is like your child’s teacher telling you “Johnny got either an F or a B+ on his project.”
Today we salute you Compton with our Real Homes of Genius Award.
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10 Comments:
Zillow's only use is to show previous sales figures, and to check to see if the property actually has the same sq footage as listed in ZipRealty.
I've been using it to track various places in Los Angeles for about a year now, and it never goes down.
Despite all the news coming out from around the country on tanking house prices, Zillow's 'Zestimates' just keep ticking upward - sometimes slower, sometimes faster - but always up.
Kevin, that's true - I've seen it too - but despite checking out the same 100-or-so houses since this time last year, the overall graph (10/5/1 yr) for the majoirty of them is still ticking upward.
Its as if the algorithm that Zillow uses just adds 1 or 2% 'price appreciation' onto its estimates every quarter or so, irrespective of what's actually happening.
Well - nothing much of anything is happening in L.A at the moment, but you know what I mean... ;-)
Added to the fact that the 'sold homes' price per square foot is mosttimes 50% lower than the 'Zestimate' (not to mention the asking price), and the most recent sold homes seem to stop at Dec 2006 - you have to wonder what kind of model they're using to create Zestimates.
I believe Zillow has poor information in many areas simply because nothing is selling.
For example, I found an area that my wife and I considered buying. Zestimates say that value is around 835K. Two houses are listed for 649K and 645K (2 months on market). 2 more are at 720 and 750 (over 180 days on market). Nothing has sold in the last year which went for 835K. Zillow only knows that prices have dropped as dramatically as they have when something actually sells. It cannot tell if nothing is selling that the prices have totally reset.
In other words, anything can happen in an illiquid market. Prices can gap down a lot.
Chuck Ponzi
www.socalbubble.com
I can see this price as realistic if the house had some sort of historical significance, like say EAZY-E grew up there or Dr. Dre grew his chronic here, but not for some run-of-the-mill stucco crib...
socalwatcher,
LMAO...dont forget about coolio and the gang.
Also, Zillow is entirely based on algorithms which computer days on market and area comparables. I dont think it takes into consideration inventory, volume of loan application, new construction starts, default rates, foreclosures in the neighborhood, etc...
Just use it for sales history and to get a good birds eye view of the neighborhood and house. And if your lucky, you can become "zillow famous" by finding yourself in front of your house mowing the lawn....LMAO
"The range is like your child’s teacher telling you “Johnny got either an F or a B+ on his project.”"
Was laughing my butt off with that one!!!! hahahahaha
Anyways, I'm a computer nerd so I realize how difficult it is to program algorithms. But it seems like Zillow employs 1st year comp sci majors with the way their zestimates work. At first I thought they had a bit of merit, but looking at their site lately they could have a zestimate as "ten bars of gold and a zebra" and it'd make just about as much sense.
The 2003 sale was probably a 2nd mortgage, which sometimes appear as sales in sale records.
Even in Compton SFH are unlikely to have sold in 2003 for under 120K.
This place looks palatial. Here's a REAL home of genius:
$298,000
MLS# 110533
3151 Oakland Ave
South Lake Tahoe, CA 96150
Beds: 0
Baths: 1.000
Square Feet: 342
$871/sqft
http://www.idxcentral.com/sltbor/idxsearch.cfm?idxid=rmorris&pg=profile&mls=110533%20&cs=any
$294,900! Damn, that's cheap for so cal. Where do I sign up?
Jeez, and I thought CHICAGO was bad.
I mean, the studio apts across the street from me have 400 sq ft.
These "homes of genius" are about the worst quality of housing you can get and live within four walls and a roof. You'd be better off in a tent.
Are the lots they're built on zoned for high-density multi-family, by any chance? I can't think of any other reason to pay more than $25K for these structure, because these are the bottom-dog neighborhoods of L.A. $45K a year, the stated "median" probably makes you rich.
Where are the POOR people living, after they get put out of the houses they paid $750K for with their $14K a year incomes?
Something has to give, everywhere. It's not quite so ridiculous in Chicago but it's still ridiculous. Pretty soon you're gonna have to be Ivanka Trump to afford a one-bed rehab in a "gentrifying" neighborhood.
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