2015 Hartford County Single-Family Sales Data

2015 was a good year for Hartford County real estate. The total number of closed single-family sales recorded in the Connecticut Multiple Listings Service (CTMLS) database was 7,701 (as of 1/6/2016).

2016-01-06 Hartford County Single Family Sales

The number of closed sales increased by 9% over the 2014 total. As the above chart shows, the market is approaching the activity levels seen in the early 2000s. The 7,701 sales are over 14% below the 2005 peak.

The increase in sales have not been equally distributed across price bands. Most of the increases have been at price points of less than $400,000, with essentially no increase in sales above $400,000.

2016-01-06 Hartford County Single Family Sales by Price Band

Year end is a good time to look at pricing trends. The chart below updates the annual calculation of median and average home prices. Although the number of sales has increased over the past few years, prices have been falling.

2016-01-06 Hartford County Single Family Prices

The big picture summary is that the region’s real estate market is still working through the impact of the financial crisis. The good news is that interest level is increasing, as shown by the increase in deals. On the other hand, prices are still adjusting downwards to look for a bottom.

We’re looking forward to seeing what 2016 brings … feel free to reach out to us if you have questions or would like more information.

Zeflections on Zillow

Earlier this week we put up a story about Zillow’s view on the value of our home. It wasn’t the first time we’ve mentioned Zillow, and I’m sure it won’t be the last. Historically we’ve only brought up the site when we we’re frustrated or amused. This mention had an interesting result – Zillow found our article and weighed in directly, and helpfully (see the comments at the bottom). It caused some debate and reflection within the Bergquist household.

City Hall SculptureThere are aspects of Zillow that I genuinely like, despite the periodic venting. For example, they do a better job than most at aggregating information about a property onto a single page. They also present the information in a reasonably clean layout that is accessible to users. I even like the idea of creating a valuation algorithm, though it’s obviously difficult get it right and can produce some weird results. Most impressively, they have done a fantastic job of building a consumer real estate website with a large user base, and we give them our ultimate vote of support by paying to advertise on the site.

As you have previously read, we have mixed feelings about the Zestimates. The main concern is that there is a conflict in how the Zestimate is used by Zillow.

My interpretation of Jay’s point in the comments of the previous post is that Zillow considers Zestimates to be infotainment. Here’s their official explanation of what a Zestimate is. They are not appraisals. They are a starting point. Buyers and homeowners should get additional information from local professionals.

This position reflects reality since the values in our area have a median error of 7.0% and are considered their highest quality estimates. It’s also the smart legal thing to do since it should protect them if a user ever tried to sue after relying exclusively on the Zestimate for a real estate deal.

Despite the company’s effort to disclose the accuracy of their Zestimates, and downplay their role in valuing a property, home buyers we have worked with have not received that message. Buyers LOVE the fact that they can pull up the site and find out how much a home is worth.

The Zestimate was the site’s original hook – it’s how Zillow drew in users and built itself into the empire that it is today. They have since added many excellent features, but the Zestimate continues to be front and center. Disclaimers are there if you look for them, but honestly, how many consumers click through to see behind the curtain?

When navigating via the map, the Zestimate is the user’s first impression of a home. You see the house icon with the color showing its status and the value underneath. Clicking through to the detail page, the Zestimate point estimate (versus the estimated value range) is right at the top, and directly under the asking price for homes that are for sale. People believe what they read on the internet and what they see is the Zestimate.

Because the Zestimate is so central to the Zillow brand, it has to be presented as reliable. Why would anyone use the site (versus a competitor’s real estate portal) if they believe the prominently featured value splashed all over the place was inaccurate?

At the same time they also have to present it as essentially “for entertainment purposes only” for both legal protection and since the algorithm isn’t all that accurate according to the published stats or the real life experience of real estate professionals working in the market every day.

It’s a catch-22 for Zillow. Yet their success shows that they have found a good balance. The site thrives despite questionable accuracy – the consumer has spoken, and they want to be entertained. It’s up to real estate agents to educate the subset of Zillow users who are tying to buy a home and believe Zestimates to be infallible truth.

 

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