Running the Numbers with HouseMath
Matt Goyer digs up a new tool that help you calculate the costs of home ownership. HouseMath 2.0 lets you calculate all the costs associated with your new purchase and gives you a true monthly cost of owning your new home.
Online property searches are evolving quickly and are morphing away from simply displaying listings on a map. Adding the proper context to the data, like Trulia’s heat maps or Oodle’s Index or Shackprices‘ neighborhood suggestions, is the next frontier of real estate online.
I’ve always liked mortgage calculators as part of a listing page - it lets a buyer quickly see if they can afford the property they are looking at. That said, most mortgage calculators only work as function of the term, down payment and interest rate and are therefore not truly reflective of the full cost of home ownership. (Unfortunately, they also tend to quickly crush my fantasies when I see how much that nice 4 bedroom is going to probably going to cost me)
HouseMath aims to fix that. It gives you a very detailed analysis what it’s going to cost you per month to own that home. It even gives you a number of charts so you can see what a buyer can truly afford. It seems to me this could be particularly useful for investors as well.
I can’t testify to it’s accuracy of their calculations as I’m no financial whiz but I’d love to hear what others find out (Noah?)
HouseMath is not live in all cities right now and does not have complete market data for all of its cities (i.e. some cities are limited to condos, or houses).
But, I’d love to see one of the big Real Estate 2.0 guys take look at this and implement it or something similar on their sites. HouseMath is already tied into Zillow’s API, so it would make sense that they could use this to supplement their Zestimates and homes for sale. Dontcha think?
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8 Comment(s)
7 Trackback(s)
- From rgvdagreat | rgvdagreat | Dec 31, 1969
- From How Much Does Purchasing a Home Really Cost? - Zillow Blog | Jan 18, 2007
- From ChitownLiving | Jan 18, 2007
- From NY Houses 4 Sale: HouseMath 2.0 | Jan 19, 2007
- From How Much Home Can You Afford? - Loan Rates and Mortgage Advice | Jan 31, 2007
- From How Much Home Can You Afford? | Nov 15, 2007
- From HouseMath 2.0 - Smart Spending | Dec 17, 2007
Drew M from Zillow | Jan 17, 2007 | Reply
Joel-
Nice find. I’m kicking myself for letting you beat me to this - it’s been on my radar for a couple weeks since I talked to the developer who built it and I just haven’t had the time to blog about it. I LOVE the application though - very useful for the consumer.
Danilo Bogdanovic | Jan 17, 2007 | Reply
What a great tool for agents and consumers alike!
How about making it possible to integrated HouseMath 2.0 into an agent’s/broker’s web site in the form of a widget or something similar. It would be a value add and marketing tool for the agent/broker while driving traffic to HouseMath 2.0 and helping spread the word about the company.
Speaking of that…when are they coming to the Washington, DC/Northern Virginia area?!
Kirill Sheynkman | Jan 17, 2007 | Reply
Thanks to everyone for the comments about the site. I am the person who built it. I was a software guy who started a couple of companies in Silicon Valley and retired to New York City at age 36, still yearning to do something technical. So, I built this site with my MBA hat on as a result of my frustration with all the rhetoric my wife and I had to endure when trying to buy a condo in New York. A lot of nonsense about “value” from people who, one would think, would have a little more math and less hearsay behind their words (consideing NYC is the financial capital of the world).
So I built HouseMath 1.0 in PHP and then discovered Ruby/Rails and used that to build a much improved 2.0 Ajax site (told you I was a geek in diguise).
A couple of things:
1. HouseMath is desinged with an exensible calculation engine at the core. That means that the “scenarios” that are there (NY Condo, Seattle House, etc.) are just the ones I happen to have had time to research. ANYTHING else can be added in a matter of an hour or so. So, if you have your favorite locale, you just need to be willing to provide me with deal specifics for that area — taxes, charges, fees, etc. New York has some weird rules, I imagine others are comparable.
2. If you want to use HouseMath on your site, I am currently wrapping up work on a “HouseMath API” which will enable you to easily take an analysis, modify parameters as you see fit (specifc to a property, mortgage, school district, whatever), run the math and get the results as XML, HTML, PDF. This is definitely coming and I welcome anyone interested to send me an email (as some already have).
3. The Math itself. I understand that it’s complex (fairly) and should be audited. I have started the work on the Wiki that will have all the calculations in detail and am thinking about a clever way to show the math right on the site. People have looked at it (not just me with a finance MBA, but real estate types) and have blessed is thus far. Not to say that there might not be things I missed. To see the “audit” page from the 1.0 site, look at the old calculations, but they have slightly changes. The idea is still the same:
http://www.sheynkmania.com/housemath/audit/audit.php
Anyone with ideas, thoughts, suggestions, critiques, please feelel free to send email to feedback@housemath.us
Christine | Jan 18, 2007 | Reply
I was playing with it this morning. I liked it. It gave alot of information and I used my own home facts, which the evaluations that were provided were pretty right on. I liked the fact how you can see what your actual cost would be in 5,10 or 20 years. I will be playing more!. Thanks!
Mortgage Audit Man | Jan 18, 2007 | Reply
Very cool and informative. Kirill, full credit to you for providing the information in a narrative form (instead of just tables with numbers) so anyone can make sense of it all pretty quickly.
Similar to the mortgage audit software I use to check my statements (it does the narrative thing with the rapid payout plans):
“To pay-off this loan in a total of 25.00 years and save approximately 32,110.56 in interest, the weekly repayments must be increased by $9.87 (to $180.64) for the next 23.95 years.”
Sooooo much better than a pile of numbers. More “geeks” should realize this
Mortgage Audit Man | Jan 18, 2007 | Reply
Very cool and informative. Kirill, full credit to you for providing the information in a narrative form (instead of just tables with numbers) so anyone can make sense of it all pretty quickly.
Similar to the mortgage audit software I use to check my statements (it does the narrative thing with the rapid payout plans):
“To pay-off this loan in a total of 25.00 years and save approximately 32,110.56 in interest, the weekly repayments must be increased by $9.87 (to $180.64) for the next 23.95 years.�
Sooooo much better than a pile of numbers. More “geeks� should realize this
Mortgage-info.com | Oct 19, 2007 | Reply
We did something similar (although does not factor tax info).
http://www.mortgage-info.com/mortgage-calculators/equitygrowthcalculator.aspx
We did this because of a shift people made from buying a home as a “home” to buying a home as an investment over the last 5 years and having to answer the question… “is this a good investment?” over and over.
I agree with #7, the layout and descriptions makes this tool very nice for Joe consumer.
Brian | Feb 16, 2008 | Reply
I really like what you’ve done here however I have a few questions. Wouldn’t it be more accurate to take into account the 250k per person capital gains exemption on real estate. And shouldn’t current rent be taken into account adjusted for inflation over time and counted as an opportunity cost to paying a mortgage payment.
I would like more information on a version of this that I could use on my web page,
Thank you,
Brian