tag:blogger.com,1999:blog-1864815735750729117.post344352571837122123..comments2023-10-31T06:28:56.237-07:00Comments on The Housing Chronicles Blog: Zillow suggests that Case-Shiller numbers mis-state the marketPatrick Duffyhttp://www.blogger.com/profile/01418865588511944900noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-1864815735750729117.post-79491679747001578282009-04-06T18:30:00.000-07:002009-04-06T18:30:00.000-07:00John - Think it through - you've almost got it. It...John - <BR/><BR/>Think it through - you've almost got it. It's not so much "who" the seller is but what their motives are. Owners seek equity gain primarily and will wait for it (relatively speaking) at the expense of cash flow. Many will pay two mortgages while they wait for their price. But they still rep. most of the transactions. Investors (mortgage holders) are entirely different ... they seek cash flow primarily and will take it at the expense of equity gain (though you wouldn't think it by how slowly some react to offers.) So, prices are higher in the price-sensitive market and lower in the time-sensitive market. You're assuming the consumer-owned market is time sensitive - it's not. So, distressed sales are typically ignored when determining "market values." <BR/><BR/>Now, if you live next door to a REO and have to sell immediately, you will need to compete with that home's price - but that's not how most market(s) play out in the aggregate.David G from Zillow.comhttp://www.mortgagesunzipped.comnoreply@blogger.comtag:blogger.com,1999:blog-1864815735750729117.post-51992230042126060702009-04-06T07:20:00.000-07:002009-04-06T07:20:00.000-07:00Zillow's point here seems idiotic. The notion tha...Zillow's point here seems idiotic. The notion that the housing is somehow worth more depending on who owns it doesn't make any sense. Do non-REO sell for more than REO? Yes, but they also sell less often, and they take much longer to sell. It doesn't matter who owns them, it matters whether they need to sell in 60 or 90 days. If you are going to be moving, and you have to have your house sold in 60 days, it doesn't mean that you should look at non-REO numbers in order to comp out your house.<BR/><BR/>But Zillow's argument is that it matters who the Seller is.John Reederhttp://www.realpropertyalpha.comnoreply@blogger.com