Comments on: Real Estate Links

Real Estate Links

greensweater — Mon, 05 May 2008 09:41:08 -0800

You're familiar with the grand-daddy of (overhyped) real estate AVMs, or even some lesser known, but more accurate competitors. In this market, it can be tough to get out from under your current home before buying new. But did you know that you can also swap your home?

By: parmanparman

parmanparman — Mon, 05 May 2008 10:26:21 -0800

A lot of people do this, it's a big part of the economy. Totally hidden of course, but multiple property owners do it all the time.

By: gurple

gurple — Mon, 05 May 2008 11:01:14 -0800

I get a kick out of these AVMs because they consistently overvalue my house by about 10-20%. When I want to feel rich, I fire up Zillow.

By: thanotopsis

thanotopsis — Mon, 05 May 2008 12:32:43 -0800

Unfortunately, there's no one in my target area with their house up for swap. I'm currently selling mine, and I'd love to swap, but I'm probably SOL.

By: greensweater

greensweater — Mon, 05 May 2008 13:28:14 -0800

I saw domuswap.com in my local paper this morning... of course folks have been doing this for vacations for years, but the permanent swap seems to be more of a product of the current economic market. Here are some more sites I found in mortgagenewsdaily.com: OnlineHouseTrading.com GoSwap.org DaytonaHomeTrader.com

By: dilettanti

dilettanti — Mon, 05 May 2008 20:22:16 -0800

I'm not sure what AVMs have to do with real estate swaps, but... I worked for a big secondary-market player for a couple of years and helped to revamp its internal AVM. AVMs will always be wrong on particular properties - the aim is generally to be close enough, most of the time, and correct on average (that is, a good model aims to have low variance and zero bias). The big problem is that data used to feed the models is always stale (data is usually purchased from aggregator services on a monthly basis, aggregator data is on average at least two weeks old, and it usually takes a few days time to run the estimates) - so AVMs are continually a month or two (or more) behind the market. A few of the larger players look to loan application data or listing data to get a forecast of where the market is going, but the best models still suffer a lag in sale or refinance values used to feed the model, and necessarily so. Data coverage is also very spotty - some states do not require public disclosure of sales prices, and most houses in most neighborhoods sell or refinance rather infrequently. Moreover, AVMs often fail to account for changes to the property itself for a long period of time - did you add a bathroom? Won't show up until after your next appraisal, tax assessment, sale or (maybe) refinance. Did your house burn down? Won't show up until your next appraisal, tax assessment, sale, or (maybe) refinance. Was your neighbor's house destroyed by a hurricane? Might reduce your house's predicted value until the data on the neighbor's house accurately reflects its current characteristics (might be awhile), and even then, because such things are sufficiently rare, the model will probably not account for the event accurately. Live in a condo? Problems with standardizing addresses can wreak havoc on AVM values. And rampant fraud is a serious problem for predicting real estate values. So AVMs will consistently be wrong on individual properties. Individuals should not rely on an AVM in determining whether they're getting a good deal on a property.