Want to know what a home is worth? You might want to skip Zillow

Today's consumers are savvy, and that is true for those looking to wade into the real estate market. Many are very well educated about what they'll be dealing with before they begin their journey in buying or selling a home. Access to information online is very much a part of that. 

One popular website, Zillow, has become an integral part of the dialogue when people are talking real estate, and with 73 million unique visitors in 2014 alone, that shouldn't come as a surprise. Being able to find active listings and information on homes that are not in the market is easy: you simply plug in the address or location and crucial information like the number of bedrooms and bathrooms, property taxes amounts — not to mention photographs and a "Zestimate" pop up.

(A Zestimate, according to Zillow.com, is Zillow's "estimated market value, computed using a proprietary formula".)

That said, it's not uncommon for me to hear (and I know that my colleagues can attest to this) folks refer to the Zestimate when talking price on a property, no matter if they are looking to purchase or sell. 

It is often distressing.

Flickr photo by Delwin Steven Campbell

Why?

Because Zestimates are not accurate.

And in an article in the LA Times, Zillow CEO Spencer Rascoff noted that nationally, Zestimates have a "median error rate" of roughly 8%.

8%? Think that doesn't seem like a lot? Consider this: on a $300,000 home, that's a $24,000 discrepancy. And that's not even considering the localized median error rates. It seems that those surpass the national median.

Some agents have done their own research into how far off the mark that Zestimates are in the local market. In markets in Virginia and California, some Zestimates were overestimated while others were well below the selling price — the latter 70% of the time. Another 25% of the Zestimate were higher than the contract price. 

According to Zillow.com, the median error rate for Michigan is 8.1%, and 6.1% for Washtenaw County, 7% for Livingston and an even higher 10.5% for Wayne County.

It's pretty easy to see how buyers and sellers might not see eye to eye when it comes to pricing. Since real estate by it's very nature is local, no matter where you live (or are looking to move) your best bet is to connect with a Realtor who can give you an accurate snapshot with regard to the information on your property or those that you're interested in. 

Chris Glahn is a licensed Realtor in the state of Michigan with RE/MAX Platinum Ann Arbor. He can be reached at 734-730-3403. 

Be prepared for tax season: Understanding the Michigan Homestead Property Tax Credit

There's always a lot of talk with regard to property taxes in the state of Michigan, and one area that can be a bit confusing to folks — especially first time homebuyers — is the Homestead Property Tax Credit (HPTC). 

The HPTC is a way to offset the cost of the property taxes on your home in the state of Michigan. Not every property qualifies. In order to be able to claim this tax credit, the property that you were filing it on must be your permanent home in Michigan and used as a principal residence (or homestead) and you must be a resident of the state for at least six months. Other criteria also apply.

 

Filing for a Homestead Property Tax Credit is easy: you simply submit the Homestead Property Tax Credit Form (MI-1049CR) along with your Michigan Individual Tax Return (MI-1040). (If you are not required to file a MI-1040, the HPTC may be filed on it's own by April 15.) Alternate forms are used by eligible veterans or their surviving spouses, active-duty military and those who are blind. 

When you purchase a home intended to be your principal residence in Michigan, another form, a Principal Residence Exemption (PRE) Affidavit, is filed the with local assessor in the municipality where the property is located. The PRE Affidavit is separate from the HPTC and can be filed by the title company that handles the closing (or the new owner can do it on their own). More details on that can be found by clicking here. 

It seems important to note that during the process of looking for a home to purchase, the property tax amount on some homes may reflect an amount that is higher then comparable properties that you've seen. That may be due to the possibility that the current owner uses it as an income property. 

For more, including how qualified health insurance premiums and other criteria may affect the Homestead Property Tax Credit, click here. 

Chris Glahn is a licensed Realtor in the state of Michigan with RE/MAX Platinum Ann Arbor. He can be reached at 734-730-3403. 

Report indicates that Ann Arbor area needs 3137 new affordable housing units within 20 years

According to a report by Virginia-based urban planning and neighborhood development consulting firm czb LLC, the housing market in Washtenaw County is in pretty good shape.

That's not to say that it can't be better.

One fact that has been stated in the 55 page report is the lack of affordable housing units — non-student housing, more specifically — in Ann Arbor. 

Conversely, the concentration of affordable housing is located in Ypsilanti. 

The report make some suggestions to improve the housing market countywide, but one is to have Ann Arbor add over 3000 affordable housing units over the next 20 years: 2787 of those in the city of Ann Arbor and 350 in Pittsfield Township. 

Countywide, there is no doubt that the market has found a sense of stability in most respects, with renters and buyers both having viable choices. (That said, there are fewer properties available for those who rent — and rent prices are rising.)

But with regard to the housing markets in Ann Arbor and Ypsilanti, the report points out there is a disparity between the two: Ann Arbor, with it's rather sturdy foundation fueled by households that are more highly educated and have the ability for upward mobility, while Ypsilanti and Ypsilanti Township bear a higher number of homes that have suffered the scars of negative equity, along with households that are on the financial brink.

Some argue that this is a jobs issue, while others say, as the report points out, that it is more of a policy issue. Further, it continues, the two markets are expected to continue moving in opposite directions unless a considerable change in policy is made. 

If not, one could expect:

• Some workers in Ann Arbor will not be able to continue to live there as housing costs will rise faster than wages, resulting in the need to commute, which has its own drawbacks.

• In the short-term, Ann Arbor will become less affordable to non-student renters, and down the road, to many buyers.

• Ypsilanti, saddled with falling property values and families who are struggling financially, will be even more affordable and the only viable option for those who were priced out in the surrounding area. 

The report (click here to read) was commissioned by the Washtenaw County Office of Community and Economic Development and funded by the U.S. Department of Housing and Urban Development, Washtenaw County, the city of Ann Arbor and the Ann Arbor Downtown Development Authority.

Chris Glahn is a licensed Realtor in the state of Michigan with RE/MAX Platinum Ann Arbor. He can be reached at 734-730-3403.