Understanding how home prices fluctuate over time is one of the most intriguing insights gleaned from my post on the reasons behind property bidding wars. Learning how prices change will empower you to make more informed purchases in the future.
I contend that timing the housing market is comparatively simpler than timing the stock market, primarily because home prices tend to change at a slower pace. Given the relatively lower efficiency of the real estate market compared to the stock market, astute real estate investors may find greater potential for profitable investments.
Analyzing four home sale examples allows us to draw conclusions that can benefit prospective homebuyers. Approximately 70% of the homes sold in this area exhibit similar price changes. While the remaining home sales may not be as pronounced, they still show signs of price recovery.
Home Price Sales Compared To Redfin Estimates
Here are four examples of homes sold on the west side of San Francisco, alongside their Redfin estimates. While I could have utilized Zillow, I prefer Redfin’s user interface and have found their valuation estimates to be more accurate.
However, it’s worth noting that both Redfin and Zillow often provide incorrect or lagging home valuation estimates. Savvy buyers or sellers can use these bad estimates to make more profitable decisions.
In each chart, the $ sign denotes the sold price, while the dark black line represents Redfin’s estimate of the property. What observations do you make?
150 Santa Paula 3782 21st Street 240 Santa Paula Ave 68 Madrone Key Takeaways From The Charts
Here are the main observations from the charts:
1) The final sales price of each home significantly exceeds the Redfin estimate for each property.
2) There appears to be confusion in the second and third examples, as Redfin indicates a positive dollar figure since
