TEXT OF STORY
Tess Vigeland: Home prices continued to tumble in January. The worst declines were in Miami and Las Vegas — both dropped more than 19 percent from the year before.
If you live in any of the hard-hit areas, you’ve probably tried to check out your own home price by going to Web sites like Zillow or Redfin. Used to be kind of fun to watch those numbers. Now… not so much, but people are relying on these sites more than ever.
From the Marketplace Entrepreneurship Desk, Stacey Vanek Smith reports.
Stacey Vanek Smith: Blogger Erin Kotecki Vest started using online real estate sites when she was thinking about selling her home a few years ago, but it wasn’t all business:
Erin Kotecki Vest: I started seeing what my parents’ house was worth, what my neighbors houses were worth and what that was doing, and then I would look for my old boss; I wonder what she was getting paid that she could afford that house.
Vest says online real estate sites helped her learn a lot about the housing market and she eventually bought a home in suburban LA with her husband. Even after the move, Vest logged in regularly to see how much her home value had climbed.
Then things turned south. Vest’s home value has dropped more than 20 percent and she’s lost most of the equity she had in her home and money isn’t coming in like it used to. Now Vest is worried she will have trouble making future payments. She says she tried to contact her mortgage company, but they were no help:
Vest: I gave them a call — “We have not missed a payment yet, but you can see the big dark cloud coming. You have to help us” — and they said they would look into it and I never received a call back.
So Vest turned to the Internet for help: informational blogs, online articles and social networking sites like Twitter.
Liz Pulliam Weston is a personal finance columnist for MSN Money. She’s gotten hundreds of letters from people like Vest whose mortgage companies told them they can’t get help until they’ve missed a payment. Weston says it’s a big mistake to wait and recommends people go online right away to start educating themselves.
Liz Pulliam Weston: The most important thing is to get some realistic and objective advice about your situation so that you can salvage something from it. Maybe you will have to sell your house, but better to sell it if you can get some money back from it and preserve your credit rating than to continue throwing good money after bad.
Glenn Kelman is CEO of Redfin, an online brokerage site that charges a much lower commission than most agents. He says his company has seen a huge demand for more information from worried home sellers and bargain hungry buyers.
Glenn Kelman: What we did to make those houses sell a little bit better is we just started looking at all the data instead of trusting the usual sales voodoo about how to sell a house.
Kelman says Redfin did hundreds of statistical studies on topics like which day you should list your house and how important it is to stage it. He says no matter how much information Redfin offers on a property, consumers always want more. Traffic on Redfin has doubled in the last year, even as sales have dropped in half.
Kelman: It feels like the appetite for information and the anxiety over being had is now infinite. That’s what we take to the bank is that because we’re a broker and we have access to the MLS, we can offer this freakish depth.
That kind of freakish depth has been a lifesaver for blogger Erin Kotecki Vest, but she says the internet has also offered an invaluable support network during a tough time.
Vest: If I were just waiting for my mortgage company to call me back, I’d lose my mind. If I didn’t have the social media network and community of people that I could reach out to and say “hey guys, help me on this” and within 20 minutes get 40 different recommendations, I don’t know how I would find that otherwise.
Vest uses chat rooms and sites these companies have created to ask questions, trade information and commiserate. About six months ago, Trulia.com launched Trulia Voices. CEO Pete Flint says it’s been an enormous success:
Pete Flint: We’re seeing consumers ask all these questions about everything from “How do foreclosures affect my local market?,” “Is now the right time to buy or should I hold?” and they’re using these online forums to answer those questions and then agents are jumping on board for those consumers and helping them and that’s a big surprise for us how popular that service is.
Of course, you can’t believe everything you read. MSN Money Personal finance expert Liz Pulliam Weston cautions against taking online information too seriously. She says the Internet is a great place to start, but recommends talking with a HUD housing councilor before making major decisions.
In Los Angeles, I’m Stacey Vanek Smith for Marketplace Money.
Vigeland: And next weekend, join us for a special program we’re calling “Homesick” — a full hour looking at the housing market morass.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.