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Wolfstreet wrote an article on why they don't use Case-Shiller anymore and switched to Zillow data. https://wolfstreet.com/2024/09/02/why-well-replace-the-case

by jarsin 2y ago

Wolfstreet wrote an article on why they don't use Case-Shiller anymore and switched to Zillow data. https://wolfstreet.com/2024/09/02/why-well-replace-the-case-shiller-home-price-index-for-our-series-the-most-splendid-housing-bubbles-in-america/ https://wolfstreet.com/2024/09/02/why-well-replace-the-case-...

alephnerd 2y ago
Zillow's pricing metrics aren't free of flaws either, as it's not an appraisal but an estimate based on aggregate data collected by Zillow (which is non-exhaustive). In SF (and the Bay in general), a lot of listings are handled locally via local RE agents or family offices and do not show up on Zillow (most notably in Chinese heavy neighborhoods like Sunset as well as the more old money Nov Hill+Richmond+Pac Heights areas). And finally, based on the information provided by this blog, it just doesn't seem like a credible source. A blog dedicated on writing about the "Housing Crisis 2.0" on a near daily basis is not a great source. Personally, as someone who is in the process of buying, inventory is low and prices are still fairly high (when factoring interest rates) because most buyers were able to buy up or refi during the near-0 interest rate days, and will not budge for that reason.
- jarsin 2y ago
  I think they are using the Zillow indexes that do include private sales, tax record sales etc. But I'm no expert just looked it up when op said it didn't match Case-Shiller. > The ZHVI is based on millions of data points in its Database of All Homes, including historical transaction prices of closed sales from public records (tax data), MLS, brokerages, real-estate agents, and individual households across the country for properties. It includes pricing data on off-market deals and for-sale-by-owner deals. The Database of All Homes also has all sales pairs.
  - alephnerd 2y ago
    ZVHI doesn't take into account additional confounding predictors such as house quality, improvements (zoned and unzoned), historic status (limits improvements and changes becoming a significant headache for buyers in SF), etc that play a role in impacting pricing in SF. Also, realtors in the Bay Area now recommend underpricing in order to spark a bidding war due to information asymmetry (buyers know the price is low but so is inventory so you need to give a significantly higher bid to lock in) - Mercury News is going to release an in-depth investigation about this in the next 1-2 months btw.
    - toast0 2y ago
      > Also, realtors in the Bay Area now recommend underpricing in order to spark a bidding war I sold my bay area house in 2018 and this was common then too. Sold for 17% above asking, but IIRC, we were expecting 10% over. A bit of a change from when I bought it in 2009 from a bank at $900 under the listing price. Fwiw, the zillow estimate is up about 33% from the sales price. Their listed comps are from nicer neighborhoods though.

by jarsin 2y ago

alephnerd 2y ago

Zillow's pricing metrics aren't free of flaws either, as it's not an appraisal but an estimate based on aggregate data collected by Zillow (which is non-exhaustive). In SF (and the Bay in general), a lot of listings are handled locally via local RE agents or family offices and do not show up on Zillow (most notably in Chinese heavy neighborhoods like Sunset as well as the more old money Nov Hill+Richmond+Pac Heights areas). And finally, based on the information provided by this blog, it just doesn't seem like a credible source. A blog dedicated on writing about the "Housing Crisis 2.0" on a near daily basis is not a great source. Personally, as someone who is in the process of buying, inventory is low and prices are still fairly high (when factoring interest rates) because most buyers were able to buy up or refi during the near-0 interest rate days, and will not budge for that reason.

jarsin 2y ago
I think they are using the Zillow indexes that do include private sales, tax record sales etc. But I'm no expert just looked it up when op said it didn't match Case-Shiller. > The ZHVI is based on millions of data points in its Database of All Homes, including historical transaction prices of closed sales from public records (tax data), MLS, brokerages, real-estate agents, and individual households across the country for properties. It includes pricing data on off-market deals and for-sale-by-owner deals. The Database of All Homes also has all sales pairs.
- alephnerd 2y ago
  ZVHI doesn't take into account additional confounding predictors such as house quality, improvements (zoned and unzoned), historic status (limits improvements and changes becoming a significant headache for buyers in SF), etc that play a role in impacting pricing in SF. Also, realtors in the Bay Area now recommend underpricing in order to spark a bidding war due to information asymmetry (buyers know the price is low but so is inventory so you need to give a significantly higher bid to lock in) - Mercury News is going to release an in-depth investigation about this in the next 1-2 months btw.
  - toast0 2y ago
    > Also, realtors in the Bay Area now recommend underpricing in order to spark a bidding war I sold my bay area house in 2018 and this was common then too. Sold for 17% above asking, but IIRC, we were expecting 10% over. A bit of a change from when I bought it in 2009 from a bank at $900 under the listing price. Fwiw, the zillow estimate is up about 33% from the sales price. Their listed comps are from nicer neighborhoods though.