What is Zillow Thinking? Home Prices To Rise Significantly Again in 2022?

Are you somebody that relies on Zillow as a main source of information for real estate?

I mean, maybe you're a homeowner, you look at it to see your Zestimate and it's going up every month.

Maybe you're a buyer out there, you're looking at that for information.

And in this post, I want to just talk a little bit about why you should be careful of the information that you're reading out there.

And there was an article that came out with Zillow that I kind of want to highlight and make as a little bit of a case study to show you that.

For those of you who don't know me, my name is Nate Short, I've been a realtor for 20 years with the local Seattle area. I'm with compass real estate.

I just want to talk a little bit about something I thought was kind of alarming in a way, because I found it to be a little bit of irresponsible reporting.

Maybe it won't be, it'll turn out to be, actually be true, but it was this article that prompted this post that I'm making today.

And it's where Zillow is predicting that the housing market is not going to normalize in 2022 here, as we head into 2023, in fact, we're going to see even wilder home price swings, and they still await.

Meaning that the prices are gonna go up at a very fast pace again this year, which I find really hard to believe.

And I just want to show you that and illustrate what we're seeing in the market. I was an economics major at the university of Washington and definitely understand supply demand.

And,? but I just want to talk about like this pricing of interest rates and how it's affecting buyers out there.

Because we're already starting to see it a little bit in the marketplace.

Let's just say that you bought a $2 million house six weeks ago, you put 20% down, $400,00, you financed $1,000,006 well at about a three and an eighth interest rate, which wasn't even at the lowest where we were in December and November of last year, that your payment would have been $6,854 about six, seven weeks ago.

Well, just within that time period the interest rates have actually risen almost two full percentage points.

Now we're at about five and an eighth, 5% as an interest rate. And if you were to factor that in and see how much the price of your payment went up, it actually went to $8,711.

It's in a significant increase.

In fact, it represents about $22,284 additional dollars of payment for the year and just to be able to afford that, just to give you an idea that you would need to make about $80,000 more to afford the same, the payment today versus say seven, eight weeks ago.

And that's a significant thing.

Something that we really can't just gloss over.

Zillow in that article, they said they're predicting about a 17.8% increase in prices.

Well, last year we had aggregately in the United States about 18.8% and here in the local Seattle area, we're up about 30%.

And I just don't see that happening as far as that rate of appreciation. I think it's important if you're a seller out there, you're thinking of selling, when's the best time, kind of talking through that.

If you're a buyer out there, are you thinking maybe prices are going to level off and these interest rates are going to, you know, obviously have a big effect with demand.

There's a lot of considerations. And I think that's the point of this post is I just want to talk through and highlight that if you're looking for really good information and it's one thing to read a Zillow article, look at your Zestimate, but talk to a professional, talk to somebody like us, you know, our team, myself, that can give you our insights into what's happening in the market, because I think it's really important, consideration and you get that clarity as you talk things out with real professionals.

Just for as an example,

I was looking at Zillow and it said my house went up over $400,000 last month.

We know this data is not great, the stuff that's coming out, and I think there's a lot of motivations behind what's being put out there on the internet.

So just to be careful with that.

So I want to thank you for reading to this post.

Hopefully you have found it useful and we will see you in the next.