Monday, February 16, 2009
Sometimes you have to wonder how much truth there really is in Jim Sollisch's WSJ editorial a month or so ago when he blamed television in general for the late great housing bubble and HGTV in particular:
The cable network HGTV is the real villain of the economic meltdown. As the viewership reached a critical mass over the past decade -- HGTV is now broadcast into 91 million homes -- homeowners began experiencing deep angst. Suddenly no one but the most slovenly and unambitious were satisfied with their houses.We happened to catch an episode of House Hunters last week where a couple was looking for a home in Bend, Oregon (see below), so we tuned in to see what we might learn.
It didn't matter if you lived in an apartment or a gated community, one episode of "House Hunters" or "What's My House Worth?" and you were convinced you needed more. More square feet. More granite. More stainless steel appliances. More landscaping. More media rooms. More style. You deserved it.
First off, when they started showing places in the $700K to $800K range, both our eyebrows went up because we've been looking in that area online and what they were being shown were nice houses, but priced a couple hundred thousand dollars too high.
Going strictly from memory (the show has long since been deleted and is apparently not available online), the couple was shown three homes that listed for $850K, $790K, and $730K and they ended up buying the middle one for about $720K.
Presumably this was sometime last summer since it appeared to be warm outside and we spotted the lowest price house still for sale, albeit at about $40K less.
It is not known with any certainty, but if I had to bet, I'd say that the house they bought appears in the Zillow popup to the right.
This one is in town with a tiny little lot that the husband agreed to after a fair bit of kicking and screaming.
If this isn't the one, it doesn't really matter because the important thing is the difference between the Zestimate and the sale price which, in this case, indicates a virtual free-fall in prices that is consistent across nearly all home sales in this price range.
A couple more samples are shown in the table to the right and, while Zillow's price estimating method is far from perfect, it does provide a pretty reliable indication of the trend and the pace of the trend which, in this case, doesn't bode well for those who made purchases in the area last year.
One thing that is surely adding to the downward price pressure is foreclosures which, if Foreclosure.com is to be believed, are absolutely soaring.
Note where the transition from foreclosures to preforeclosures occurs below - 604!
This couple seemed so happy when they were on the show (except for the husband, at times, who clearly wanted a bigger back yard).
I wonder if they would have purchased if not for being on show - they were renting in the area at the time and presumably could have continued doing so.
They would have saved a lot of money.
I also wonder if they have any idea how rapidly home prices are falling?