A house in the Seattle area sold for $1,000,000 in April 2019.
How much would the same house sell for in April 2021? Assume away “someone wanted to sell after only 2 years” considerations; maybe instead a better phrasing is “a house in the Seattle area had an extremely credible offer for $1,000,000 in April 2019, which was not acted upon and records of which are not publicly available”.
My forecast is based on historical data from Zillow. I explained my reasoning in the notes. The summary is that housing prices haven’t changed very much in Seattle since April 2019 (on the whole it’s risen 1%). On the other hand, prices in more expensive areas have stayed the same or declined slightly. I settled on a boring median of the price staying the same. Due to how stable the prices have been recently, I think most of the variation will come from the individual house and which neighborhood it’s in, with an outside chance of large Seattle home value fluctuations.
Most of the variance I’ve seen discussed comes from a severe change in the tech labor market producing a severe change in the housing market in the Bay Area, Seattle, etc. Did you intentionally or unintentionally leave out the effects of COVID? Or are they wrapped up in black swans?
I must admit I haven’t followed the discussions you’re referring to but if I were to spend more time forecasting this question I would look into them.
I didn’t include effects of COVID in my forecast as it looks like the Zillow Home Value Index for Seattle has remained relatively steady since March (2% drop). I’m skeptical that there are likely to be large effects from COVID in the future when there hasn’t been a large effect from COVID thus far,
A few reasons I could be wrong:
Zillow data is inaccurate or incomplete, or I’m interpreting it incorrectly.
COVID affects variation of individual housing prices much more than the trend of the city as a whole.
The COVID effects will be much bigger in the next half of a year than in the previous. Perhaps there will be a second wave much worse than the market is pricing in which produces large effects.
Cool deal. The reason I asked about black swans was specifically because of the potential permanent shift in companies’ allowance or even desire for remote work. Chance seems low but significant, impact seems modest with a chance of large.
A house in the Seattle area sold for $1,000,000 in April 2019.
How much would the same house sell for in April 2021? Assume away “someone wanted to sell after only 2 years” considerations; maybe instead a better phrasing is “a house in the Seattle area had an extremely credible offer for $1,000,000 in April 2019, which was not acted upon and records of which are not publicly available”.
My forecast is based on historical data from Zillow. I explained my reasoning in the notes. The summary is that housing prices haven’t changed very much in Seattle since April 2019 (on the whole it’s risen 1%). On the other hand, prices in more expensive areas have stayed the same or declined slightly. I settled on a boring median of the price staying the same. Due to how stable the prices have been recently, I think most of the variation will come from the individual house and which neighborhood it’s in, with an outside chance of large Seattle home value fluctuations.
Most of the variance I’ve seen discussed comes from a severe change in the tech labor market producing a severe change in the housing market in the Bay Area, Seattle, etc. Did you intentionally or unintentionally leave out the effects of COVID? Or are they wrapped up in black swans?
I must admit I haven’t followed the discussions you’re referring to but if I were to spend more time forecasting this question I would look into them.
I didn’t include effects of COVID in my forecast as it looks like the Zillow Home Value Index for Seattle has remained relatively steady since March (2% drop). I’m skeptical that there are likely to be large effects from COVID in the future when there hasn’t been a large effect from COVID thus far,
A few reasons I could be wrong:
Zillow data is inaccurate or incomplete, or I’m interpreting it incorrectly.
COVID affects variation of individual housing prices much more than the trend of the city as a whole.
The COVID effects will be much bigger in the next half of a year than in the previous. Perhaps there will be a second wave much worse than the market is pricing in which produces large effects.
Cool deal. The reason I asked about black swans was specifically because of the potential permanent shift in companies’ allowance or even desire for remote work. Chance seems low but significant, impact seems modest with a chance of large.