Comparing Zillow’s market stats from August 2019 to March 6th, 2020, Zillow Home Values San Diego states on their website that “The median home value in San Diego County is up from $591,500 to $652,175. Zillow San Diego County home values have gone up 3.9% over the past year, and Zillow predicts they will rise 5% within the next year. The median list price per square foot in San Diego County is $487 compared to $382 per square foot back in August, which higher than the San Diego-Carlsbad Metro average of $390.
Foreclosures Will have little to no impact on home values in the next several years. Zillow claims in San Diego homes are foreclosed at a ratio of .3 homes per thousand. In The San Diego Carlsbad Metro area, foreclosures are running at .5 per thousand. Both San Diego and Carlsbad Metro are well below the national value of 1.2.
The truth is that is only a real estate portal that sells advertising to real estate agents and other advertisers. A lot of consumers feel as if Zillow is a real estate authority, yet nothing could be further from the truth. To our knowledge, Zillow does not employ traditional real estate agents, they merely sell your information as a lead to third parties.
When you give up your information to Zillow, you can expect to receive a number of phone calls from several different brokerages and additional third parties. How do I know this, I have tried it myself as a consumer. I went on Zillow’s website and asked for information about a specific property. I expected to only receive one call from a real estate agent, yet much to my dismay, I received many phone calls from several different agents and mortgage brokers as well!
How Zillow Zestimates Determine Home Value
While Zillow may do its best to give you an accurate assessment home’s value, yet in the end, it is only an automated system that cannot think for itself. Zillow simply cannot take into account all of the possibilities that can affect the value of your San Diego home.
Zillow uses a proprietary formula to determine the value of your San Diego home based off of information the website has obtained from public records and information entered by users. Zillow’s home value algorithm knows what the your home previously sold for as well as how much other homes sold for in the surrounding area. While Zillow’s home value formula is proprietary, we can conclude that they are also using information from the San Diego County Tax Assessor’s Office and looking at the assessed home value as one of their factors.
If you’re looking to find out the real value of your San Diego home, you want to work with a local agent who is familiar with the San Diego real estate market. There are many factors to consider when buying or selling a home. The San Diego real estate market is much like the commodity market, because it is based on supply and demand. An experienced real estate agent will be able to help you determine accurate assessment of a home’s value.CLICK HERE TO BUY OR SELL A HOME
Unfortunately, there is so much misinformation from Zillow that they end up confusing San Diego home buyers and home sellers. If you look on Zillow’s website, they describe their accuracy in the San Diego region as falling into several categories of accuracy. To keep things simple, let’s just talk about where Zillow is most accurate.
Zillow states that they are “99.5% accurate within 20% of the sales price for a Zestimate” done on a San Diego Home. Obviously, that’s just not close enough to be relied upon. When referring to home prices in San Diego, their website states the following:
“Foreclosures will be a factor impacting home values in the next several years. In San Diego County 0.5 homes are foreclosed (per 10,000). This is the same as the San Diego-Carlsbad Metro value of 0.5 and also lower than the national value of 1.2.”
Sorry Zillow, you’re wrong again, the foreclosure crisis has passed a long time ago, and foreclosures are not affecting values of San Diego homes.
“The Zestimate® home valuation model is Zillow’s estimate of a home’s market value. The Zestimate incorporates public and user-submitted data, taking into account home facts, location and market conditions”.CLICK HERE FOR FREE HOME VALUE REPORT
“It is not an appraisal and it should be used as a starting point. We encourage buyers, sellers and homeowners to supplement the Zestimate with other research such as visiting the home, getting a professional appraisal of the home, or requesting a comparative market analysis (CMA) from a real estate agent.”
I agree with Zillow on the above statements! Zillow is NOT in the business of appraising homes. Did you know that when banks are looking for an accurate home assessment they will often seek out a licensed real estate agent, It’s absolutely true, a bank will seek out agent to do what’s called a broker price opinion. I can assure you that no bank has ever sought out Zillow to determine the price of a home!
If you’re like many San Diego homeowners, you most likely go to the Zillow website and attempt to determine your home’s value. When you use the Zillow Zestimate, you will get a price, yet do not rely on that price to be accurate. What you don’t see is the fine print that explains “It is not an appraisal and it should be used as a starting point. We encourage buyers, sellers and homeowners to supplement the Zestimate with other research such as visiting the home, getting a professional appraisal of the home, or requesting a comparative market analysis (CMA) from a real estate agent.”
Homeowners in San Diego will soon have another way to sell their home, using a program called Zillow offers. With your mobile device or desktop, you will be able to get an all-cash offer on your San Diego home. Homeowners will want you to answer a few questions online, and before you know it, you will get an all-cash offer on your home.
Now before you get too excited, don’t expect too much from Zillow Offers. In other words, expect a low-ball offer on your home that will probably be below the San Diego market value. I think Zillow is using this technique to get their foot in the door to get your attention. I guess that most San Diegans will end up being unhappy with the offer amount and then I predict that Zillow will sell your information to the highest bidder. The highest bidder will be an agent who is willing to pay top dollar for a real estate lead. Yep, you guessed it; you are nothing more than a real estate lead sold like a common commodity!
Save yourself the trouble of using Zillow Offers, and use a REALTOR® who is familiar with the San Diego market. You see, when you have the right agent working for you, there is a fiduciary relationship created where your agent MUST act in your best interests! The right agent can negotiate on your behalf on a traditional sale, and help you get the highest possible price on your home!
Why give away 20% of the value of your home before you put your house on the market and potentially list it for more than it’s worth? You could end up wasting precious time and watch months go by without an offer. When a homeowner has unrealistic expectations about their home’s value, the result can be their home sitting on the market for too long because it is priced too high. Conversely, if you list your home below the current market, you could end up leaving money on the table!
If you want the actual value of your home, use the free tool on our website. Now you might be thinking, what’s the difference between Zillow’s tool and our home value tool?CLICK HERE FOR FREE HOME VALUE REPORT
When demand for San Diego homes increases with a low supply, prices will rise faster. The difference between houses and other goods is that we buy them with a mortgage. So, it’s not the actual price that matters, but the price relative to purchasing power.
The chart below will explains the real estate market and the various stages that we could be in. A market that has less than six months of supply is considered a sellers’ market and can expect your home price to appreciate. A real estate market that has between 6 to 7 months of supply is considered a neutral market. According to experts, home prices will only appreciate with the rate of inflation. When we have a housing supply that’s greater than seven months, we would be in a buyers market and home prices would be depreciating.
“When the demand for San Diego homes increases with a low supply, prices will rise faster. The difference between houses and other goods is that we buy them with a mortgage. So, it’s not the actual price that matters, but the price relative to purchasing power.”
Updated August 2019
Modest Price San Diego Home Price Gains Predicted For San Diego into 2020
The San Diego Housing Market Has Cooled
After many years of price gains, the San Diego housing market has begun to cool off. Because victory has increased in most parts of the San Diego market is balanced yet shifting in favor of buyers.
Based on the latest data from Zillow, median San Diego home prices are up modest 1.9%. In the future, Zillow predicts even smaller towards 2020. In July 2019, Zillow stated:
“San Diego home values have gone up 1.9% over the past year, and Zillow predicts they will rise 0.9% within the next year.”
Presently as of August 2019, the median home value in San Diego was around $635,000. Some industry experts don’t see prices climbing much higher, yet many factors that can affect your hyper-local neighborhood.
While most local San Diego Agents don’t rely on Zillow for their information, there’s nothing wrong with looking at their data. Of course, our team is always comparing what Zillow predicts to the professional data that is only provided to local San Diego REALTORS.
Forecasts by Zillow are just a guesstimate of where the market could be now. When in doubt, reach out to a member of our team so we can interpret the data for you so you can make informed buying or selling decision.
San Diego Home Buyer Inventory
In recent years, San Diego like as been experiencing a hot seller’s market. Over the past several years, there has been a housing shortage. Unfortunately, the housing shortage may it difficult for buyers who are looking to purchase a home. It’s all about supply and demand; when the supply is low, and the demand is high, home prices rise. Currently the market is somewhat neutral, so that makes this the perfect time to consider buying or selling a home.
First Time Home Buyers
If you’ve been waiting for the right time to enter the market, there could never be a better time. Interest rates are still at all-time lows, and with a larger supply of inventory our team can usually negotiate to have the seller pay for your closing costs!
Move Up Sellers – Move Down Sellers
Many home sellers did not put their homes on the market because of the previous housing shortage. In a balanced market still get top dollar for your home, while being able to get a great deal on a new home.CLICK HERE TO BUY OR SELL A HOME
San Diego Real Estate Market Monthly Indicators
In July, the U.S. economic expansion that began in June 2009 became the longest in the nation’s history, marking 121 straight months of gross domestic product growth and surpassing the 120-month expansion from 1991 to 2001.
The average rate of growth during this expansion has been a milder 2.3 percent per year compared to 3.6 percent during the 1990s. Although the economy should continue to perform well for the rest of 2019, most economists see a mild recession on the horizon.
San Diego Real Estate Closed Sales decreased 3.3 percent for Detached homes and 2.8 percent for Attached homes. Pending Sales increased 15.3 percent for Detached homes and 14.0 percent for Attached homes. Inventory decreased 12.3 percent for Detached homes and 1.5 percent for Attached homes.
Zillow’s website for San Diego states that “the median home value in San Diego is $634,600. San Diego home values have gone up 1.7% over the past year and Zillow predicts they will rise 0.1% within the next year.”
According to The Greater San Diego Association of REALTORS as of July 2019 The Median San Diego Sales Price was up 0.6 percent to $655,000 for Detached homes and 1.2 percent to $435,000 for Attached homes. Days on Market increased 3.6 percent for Detached homes and 8.0 percent for Attached homes.
Supply decreased 7.1 percent for Detached homes but increased 9.1 percent for Attached homes. In other words, condos in San Diego are sitting on the market longer. During the record-setting 121-month economic expansion, the unemployment rate has dropped from 10.0 percent in 2009 to 3.7 percent, yet many consumers continue to struggle financially.
Low mortgage interest rates have helped offset low housing affordability, but high home prices are outpacing median household income growth. In a move to stoke continued economic prosperity, the Federal Reserve reduced the benchmark interest rate by a quarter point to about 2.25 percent, marking the first reduction in more than a decade.
Our team is here to help you whenever you are ready. We promise to give you accurate information and guide you through the home buying or selling process. Just reach out to us by clicking on our contact form or calling at 858.451.9000.