I found the following plea on our Sparr Heights Facebook group: (which is an awesome group, BTW)
Does anyone know why my home value is dropping thousands of dollars by the day? Ours appraised low and then I see that two other houses for sale in our area have been dropped as much as $36,000 in just over two weeks. Anybody have any idea what is going on? It is not good news for any of us.
I completely understand the concern. I counsel homeowners nearly every day though the stress and angst over their home value.
You must understand there is no exact formula for your home's value. There is, at best, an educated opinion. This opinion should be based in fact, like a recent sale that is similar to your home. However, a home is worth what a willing buyer and a willing seller can agree upon and no two sellers and buyers have the exact same stories.
Because of this, making assumptions about the dollar value of your home based on watching Zillow or a neighbor's experience is a recipe for distress. The individual experience, in fact, tells you nothing about your home's value, unless that home is very similar to your own in size, location and amenities.
If you are casually interested in value and you have no intention of selling now, but you want to know if things are going up or down in your area, then I think it is important to pay attention to local reports on Glendale Home Value trends and Glendale Home Sales reports. This will give you an idea of two important things: direction and velocity.
When you consider the direction a market is headed, you can't look at just where we are this month compared to last. Nor can you really look at where we are this month compared to this same month last year. Consider, instead, the overall graph of 12 to 15 months. Are we generally trending up or down?
Again, I urge you to look at the big picture. When you compare month to month you can really freak yourself out. One super huge sale or a coincidental flurry of small ones can lead to a heart stopping spike or drop in the price graph! Take a look at that 12 to 15 month trend. How much is that line sloping over time? I think this gives you a more accurate perspective on how the market is doing.
Ok, with all of this in mind, let's take a closer look at your question.
"Does anyone know why our home values are dropping thousands of dollars a day?"
Looking at the market on a day to day basis is crazy and, as long as you are not actively selling, not relevant to your home's value. The value of "this" home on "this" day is all about the seller's motivation, the competition of homes on the market right now and the motivation of this exact pool of buyers. None of these factor relate to you.
"Ours appraised low"
I assume you ordered an appraisal due to a refinance? The dirty secret in our industry is that appraisal is not an exact science. The result is that appraisals can vary, sometimes greatly, based on the individual appraiser, the lender and the circumstance. Refinance appraisals are known to be among the lowest values an appraiser will give.
"I see two other homes in our area have been dropped as much as $36,000 in just over two weeks"
There are many reasons for this that can be unique to that home. They may have the wrong pricing strategy. The seller might have a need to sell in a particular time frame. There might be a recently discovered problem that has impacted the value. Unless you are currently on the market, none of these factors directly impacts your home's value. You need to weigh the eventual sales price of these homes, along with all of the other sales in the area, to see how this affects your home.
But what if I DO want to sell?
If you decide to list your home, it is crucial that you have a realtor who is able to understand and advise your actions to leverage these changeable times. A successful sale depends on a large set of components that must come together in a very specific way. One small mis-step is often the difference between closing escrow or staying put.
Kendyl Young blogs daily at www.KendylsOpenHouse.com and she covers Glendale Home Values, La Canada Flintridge Home Values and La Crescenta Home Values. You call or text her at 818-396-7588 or email email@example.com. Send your amusing tweets to @kendyl