If Zillow isn't able to accurately estimate the value of the houses it's buying, there's no reason to think it's accurately zestimating the value of your house either.
Guest
Anonymous
November 10, 2021 6:53 pm
At the request of someone who was in the middle of a sale to Zillow Offers, I reviewed their purchase contract. Zillow Offers put down a whole $1,000.00 EMD and the sole remedy if they default on the purchase is forfeiting the EMD as liquidated damages. I wonder how many pending purchases they have outstanding with a whole $1,000.00 EMD that they're just going to default on to stop the losses?
But you will not have compensable damages because you signed a contract for liquidated damages.
Guest
Anonymous
November 10, 2021 8:34 pm
I think the real issue is that zillow is artificially manipulating the market. Either they're screwing buyers or they're screwing sellers. Either way, they are setting us up for another 2008. And that was so much fun.
Oh, but it's not possible to have another bubble because there aren't subprime loans! *eyeroll* I can't believe how many otherwise intelligent people I know have said this in the past year. We're in a bubble. RIGHT NOW. Is it the top? There are some indications, but who knows. I can't tell you when or how it's gonna pop, but the pop is coming. Zillow and other ebuyers could conceivably aggravating factors, but I don't think they are big enough to be the precipitating factor.
The spike is caused by 2.5% money. So long as there is cheap money, buyers are going to lock down property and be able to service the debt. Average mortgage rate in 2006 was 6.41%; average mortgage rate for 2007 was 6.34%. That means a $400k mortgage in 2006 averaged $2504 a month in payments.
Average mortgage rate for 2021 is 2.93%. That means a $400k mortgage in 2021 averaged $1671 a month in payments. There is a rental crisis right now so investors can swoop up properties and know that all they have to do is keep tenants at rents that can service $1671 a month. Easy. Rates go up? Buyers dry up, BUT you also will not have panicked Sellers because Sellers can wait it out with low rates.
@12:40 totally agree with you. I remember in 2004 telling people there was no way the vegas real estate market was sustainable and they assured me it was, gave me all the talking points on why houses were so expensive here, blah blah. And 7 years later they were short selling their house.
"The spike is caused by 2.5% money." This is probably true. So what happens to the housing market when the interest rates go up? Presumably, prices plunge. When people buy a mortgage, they usually think about it in terms of the monthly mortgage payment, not the overall purchase price. So now you'll have people who are upside down in houses with phenomenal interest rates. It will be interesting to see what happens from there.
4:07 prices should not plunge. In addition to the higher interest rates and liars loans, in 2008 we had lots of exotic mortgage products like interest only or negative amortization products. So lets say you bought your house in 2003-2004 on a 5 year interest only product, you a) haven't paid the principal at all and b) you now face a drastic rise in your payment. What is likely to happen is sales will slow. Prices will come down. We will see flat prices for a while, if not a lowered valuation.
4:52 is correct. I predicted for a long time that this was a bubble because I lived through the Subprime Disaster but had an economist walk me through the differences this time and they are striking. Prices will not plunge because you presently have people in homes at sustainable monthly payments which you did not have in 2007-2009. You will not have the churn in the market as people will stay put but you will not have the bottom fall out. Now I think the concept of 2% borrowing rates for 30 years is asinine that is likely not great for many sectors of the economy and is obviously not sustainable. But the foundationless bubble is likely not true.
I refinanced my mortgage earlier this year into a 15 year at 1.99% through Costco. Just crazy cheap money. I don't know what will happen over all with all this, but I certainly took advantage.
Same old story: government creates a problem, the market solves it, and the government punishes the market. Siegel Suites should be feted as a hero to the underprivileged and disadvantaged. They've done more for the underserved than every self-righteous government bureaucrat put together, times an entire County Commission.
Guest
Anonymous
November 10, 2021 10:07 pm
Is anyone else having issues with USDC-NV e-filing today?
Holy Schnikes Capriati! The insurance part of the decision I understand. The Offer of Judgment portion is insane to me and completely undermines the entire policy rationale for NRCP 68.
Guest
Anonymous
November 11, 2021 5:08 pm
I respect the hell out of Schonfeld and Chesnoff as criminal lawyers but this "Blame the Fire Department for not saving the woman that our client killed" strategy just seems ludicrous to me.
Not a criminal attorney, but just as a member of the public I find this to be really offensive. If I was on a jury and this was suggested by defense counsel it would piss me off.
Zillow needs to be sued
https://www.bloomberg.com/news/articles/2021-09-24/why-is-zillow-buying-up-houses-viral-tiktok-criticizes-firm-for-price-jump
If Zillow isn't able to accurately estimate the value of the houses it's buying, there's no reason to think it's accurately zestimating the value of your house either.
At the request of someone who was in the middle of a sale to Zillow Offers, I reviewed their purchase contract. Zillow Offers put down a whole $1,000.00 EMD and the sole remedy if they default on the purchase is forfeiting the EMD as liquidated damages. I wonder how many pending purchases they have outstanding with a whole $1,000.00 EMD that they're just going to default on to stop the losses?
On the other hand, what are the Sellers' true losses on a residential property in the middle of an appreciating market?
Arguably, if the market slows down or starts dipping, then you'd have damages
But you will not have compensable damages because you signed a contract for liquidated damages.
I think the real issue is that zillow is artificially manipulating the market. Either they're screwing buyers or they're screwing sellers. Either way, they are setting us up for another 2008. And that was so much fun.
Oh, but it's not possible to have another bubble because there aren't subprime loans! *eyeroll* I can't believe how many otherwise intelligent people I know have said this in the past year. We're in a bubble. RIGHT NOW. Is it the top? There are some indications, but who knows. I can't tell you when or how it's gonna pop, but the pop is coming. Zillow and other ebuyers could conceivably aggravating factors, but I don't think they are big enough to be the precipitating factor.
The spike is caused by 2.5% money. So long as there is cheap money, buyers are going to lock down property and be able to service the debt. Average mortgage rate in 2006 was 6.41%; average mortgage rate for 2007 was 6.34%. That means a $400k mortgage in 2006 averaged $2504 a month in payments.
Average mortgage rate for 2021 is 2.93%. That means a $400k mortgage in 2021 averaged $1671 a month in payments. There is a rental crisis right now so investors can swoop up properties and know that all they have to do is keep tenants at rents that can service $1671 a month. Easy. Rates go up? Buyers dry up, BUT you also will not have panicked Sellers because Sellers can wait it out with low rates.
@12:40 totally agree with you. I remember in 2004 telling people there was no way the vegas real estate market was sustainable and they assured me it was, gave me all the talking points on why houses were so expensive here, blah blah. And 7 years later they were short selling their house.
"The spike is caused by 2.5% money." This is probably true. So what happens to the housing market when the interest rates go up? Presumably, prices plunge. When people buy a mortgage, they usually think about it in terms of the monthly mortgage payment, not the overall purchase price. So now you'll have people who are upside down in houses with phenomenal interest rates. It will be interesting to see what happens from there.
4:07 prices should not plunge. In addition to the higher interest rates and liars loans, in 2008 we had lots of exotic mortgage products like interest only or negative amortization products. So lets say you bought your house in 2003-2004 on a 5 year interest only product, you a) haven't paid the principal at all and b) you now face a drastic rise in your payment. What is likely to happen is sales will slow. Prices will come down. We will see flat prices for a while, if not a lowered valuation.
4:52 is correct. I predicted for a long time that this was a bubble because I lived through the Subprime Disaster but had an economist walk me through the differences this time and they are striking. Prices will not plunge because you presently have people in homes at sustainable monthly payments which you did not have in 2007-2009. You will not have the churn in the market as people will stay put but you will not have the bottom fall out. Now I think the concept of 2% borrowing rates for 30 years is asinine that is likely not great for many sectors of the economy and is obviously not sustainable. But the foundationless bubble is likely not true.
I refinanced my mortgage earlier this year into a 15 year at 1.99% through Costco. Just crazy cheap money. I don't know what will happen over all with all this, but I certainly took advantage.
Siegel suites getting in trouble with congress: https://www.nevadacurrent.com/blog/congressional-panel-demands-siegel-provide-information-on-eviction-practices/
Same old story: government creates a problem, the market solves it, and the government punishes the market. Siegel Suites should be feted as a hero to the underprivileged and disadvantaged. They've done more for the underserved than every self-righteous government bureaucrat put together, times an entire County Commission.
Is anyone else having issues with USDC-NV e-filing today?
Yes.
I am having issues with Jennifer Dorsey's court reporyer. Recently called her, wow.
Thank god for Matt Hoffman, legal expert and master of all practice areas – what would the Las Vegas valley do without him…
#freerittenhousejudge
#freebonniebulla
#freedetr
Can we talk about the Capriati decision that came down yesterday? Save it for today's post?
Holy Schnikes Capriati! The insurance part of the decision I understand. The Offer of Judgment portion is insane to me and completely undermines the entire policy rationale for NRCP 68.
I respect the hell out of Schonfeld and Chesnoff as criminal lawyers but this "Blame the Fire Department for not saving the woman that our client killed" strategy just seems ludicrous to me.
https://www.reviewjournal.com/investigations/ruggs-lawyers-allege-firefighters-were-slow-to-put-out-blaze-in-victims-car-2475875/
Not a criminal attorney, but just as a member of the public I find this to be really offensive. If I was on a jury and this was suggested by defense counsel it would piss me off.