Taking inspiration from the success of Zillow and Trulia’s ‘cool’ web site widgets, PriceFinder has recently released its own range of agent website tools for Australia. Widgets are an easy way to enhance your own website, increasing traffic and generating leads.

According to Kent Lardner, Chief Operating Officer of PriceFinder;
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By Kent Lardner for Lending Central

The US mortgage and appraisal market has spent a considerable amount of time in the last 12 months on the implementation of the Home Valuation Code of Conduct. This is one of several strategies being implemented as a result of the mortgage crisis.

One hot-topic as a result of this code is the increased use of appraisal management companies, called ‘AMCs’ for short, who manage up to 90% of the total appraisal market according to the Appraisal Institute. One problem attributed to AMCs has been the increased use of ‘out-of-town’ valuers, with the Institute recently stating a problem with ‘appraisers in California who travel 150 to 200 miles to do an appraisal’.

In Australia there are distances and locations that individual valuers will find excessive, especially in metropolitan areas. In regional areas, longer distances are generally the norm, so there can be no hard and fast rule. The circumstances that should be considered include the number of valuers available to serve a specific location at a specific time and the competence of the individual valuer for that particular job.
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By Kent Lardner for Lending Central

The Wall Street Journal did an analysis of the Zillow valuation model for 1,000 home sales in early 2007. It found that “the median difference between the Zillow estimate and the actual price was 7.8 percent.”

According to The Wall Street Journal test results, when it was wrong it was very wrong, off by 25 percent for one in 10 properties. This is certainly the case here in Australia too. You could be testing a model and find the first 9 properties return amazing results, all within a few percent of the sale price, then the next one could be 20% or more off target. It’s these few large errors that have such a significant impact on the forecast standard deviation (error estimate).
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Property prices in the tourist towns of Cairns, Broadbeach, Mooloolaba and Hervey Bay have been placed on red alert as tourism job losses escalate, according to new research by Price Finder.

Home unit prices, which account for the majority of sales, have already dropped by 30 per cent in Cairns city and 13 per cent in Broadbeach in the past 12 months.

Price Finder researcher Kent Lardner said there was an oversupply of home unit stock in all of these areas. In Cairns the oversupply meant there was currently 45 months worth of home units on the market.
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An employment vulnerability index for Australia’s major urban regions’ by researchers at the University of Newcastle’s Centre of Full Employment and Equity (CofFEE) and Griffith University’s Urban Research Program (URP) identifies the suburbs across Australia that are most vulnerable to job losses as a result of the current economic crisis.
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By Michaell Taylor, Principal/Co-Founder
Boxwood Means, Inc.

The United States is arguably ground zero for the global financial meltdown. We can observe here the consequences of some of the worst cases of feeble risk management and irresponsible lending practices which, in turn, have resulted in the creation of a financial hole of staggering proportions.
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Do over priced real estate listings usually lead to unsold properties?

PriceFinder Research Director, Kent Lardner, conducted an analysis of properties yet to be sold and still listed on the market after 50 days. New estimated prices where then used to calculate how much each listing was over or under priced.

“Our results confirmed that in nearly 50% of cases, the unsold properties had been listed at prices 10% or more above our PriceFinder estimate”, Kent said.
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A dependable and accurate house price index is an important tool. High changes in house prices (either up or down) can have a significant impact on consumers, businesses and government. As sales volumes in many areas in Australia fall, the sample sizes used to calculate median prices is reduced.
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Research conducted by Property Data Solutions suggests that property owners who hold for 6 years or longer are getting the best possible prices.

Kent Lardner of PDS conducted the analysis of over 120 property sales over the last 6 months in a variety of suburbs around Sydney and in nearby regional centres. Houses included in the tests had been owned for periods of between 1 and 10 years.
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Government departments, data resellers and end users (such as valuers) alike rely on accurate sales data. An internal government audit in NSW highlighted a wide variety of problems, including duplicated, corrupted and missing data.

The Office Of State Revenue estimated that “95% of sales data was accurate” in a report published in 1998. New initiatives such as the National Electronic Conveyancing System (NECS) may help, but data resellers and end users can add considerable value to identify and filter errors as well as speed up the process.
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Ceteris paribus is a Latin phrase, literally translated as “with other things the same.” It is commonly rendered in English as “all other things being equal.” A prediction, or a statement about causal or logical connections between two states of affairs, is qualified by ceteris paribus in order to acknowledge, and to rule out, the possibility of other factors which could override the relationship between the antecedent and the consequent.

Tipping the next property hot spots and forecasting suburb growth rates makes for great reading. Magazines and weekend newspapers regularly make these reports a feature. We are all keen to review our own suburbs and speculate on investment opportunities.
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Story collected exclusively for Lending Cental by Kent Lardner, offering an expert insight into the current valuation market for lenders in the US.

In troubled times for real estate housing markets, lenders must rely heavily on reliable and unbiased valuation techniques to mitigate risk in lending decisions. In the U.S., where local home prices have declined by 30% or more since the housing market peaked in 2006, the need for reliable market value estimates has grown acute. The cyclical nature of the real estate market now highlights more than ever the growing use, performance and, above all, testing of automated valuation models (AVMs).
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Back in 2000 the American Appraisal Institute stated that ‘the market needs a more rational, objective, scientific basis on which to make decisions, performed by professional individuals competent both in appraisal theory and practice and in computerized data analysis and reporting’.
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Street View is a hit

Google Street View has more extensive coverage in Australia than the US - the only other country with a nationwide coverage. Subscriber services (like pdslive) available to valuers, lenders or real estate agents have had a pretty big challenge up until now when it came to street photos in Australia. Full Story

In the lead up to a NSW state election in the mid 80’s, the Liberal opposition at that time distributed a leaflet that claimed, ‘Once the Labor Government has mapped your area … the value of your property could be reduced by up to 50%’. With mapping and data now openly available to identify such environmental risks, the market will be free to dictate how property prices move. However the biggest impact on housing may be attributed to the decisions of both government and insurers.
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