patrick.net

I had some relatives buy near the peak, with a 10-year Interest Only mortgage, in San Carlos, and are either 1) naive or 2) in denial about their situation.

Here's a home that is 2.4 miles from their place, built 50 years+ ago like theirs, and is about equidistant to the 280 and 101:

http://www.redfin.com/CA/San-Carlos/2335-Saint-Francis-Way-94070/home/799850

It is a 3 / 3.5 with 2,070 sq feet.  There are two ways to use this home as a comparable to come up with an approx. value for my relatives' house:

1)  Using dollars per square feet:  (generously) assuming they get their asking price of $948,500, that is $458 per sq ft.  Using that value my relatives' would now be worth $760,632 (they paid $960,000!! in Oct 06).

2)  Using Zillow's crazy numbers, but factor in a relative adjustment:  Zillow has the above house's value at $1,108,000.  Gee, that's funny, it is "worth" $1,108,000, but the sellers are selling it for $948,500!  Something's wrong with this picture.  Hint:  Zillow is on Kool-Aid.  Anyway, take Zillow's number and subtract how much they are really asking (the true value, assuming they get it!), and you can come up with a "percentage that Zillow is too high."  That percentage happens to be 14.39%, so then look up Zillow's estimate value on my relatives' house and subtract 14.39% from that value....that number is:  $817,500.

So by these two rather quantitative, no-b.s. comparison methods, my relatives are down somewhere between $142,500 - $199,000 on their original purchase price. 

#housing