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Old 03-05-2014, 06:58 AM   #21
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Zillow does publish their accuracy data - Data Coverage and Zestimate Accuracy - Zillow

As you can see, they admit they have a median error of 5-9% in most markets and are not within even 10% of the actual sales price about 30-40% of the time.

As a Realtor I get the "zestimate" question quite often but it's pretty easy to refute zillow as a true valuation using their own published data.
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Old 03-05-2014, 07:02 AM   #22
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Referencing zillow for home values is like asking your barber if he thinks you need a haircut.

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Old 03-05-2014, 08:26 AM   #23
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I think the prices you see on Zillow are pretty much based upon the property taxes you pay, (assessed valuation). I can use my existing house as example. About 5 years ago I found out that I was paying significantly more in property taxes compared to neighbors and Zillow showed my house valued above all other similar houses within several blocks.

I protested my taxes with the township and was given a reduced valuation which resulted in lower property taxes for a couple of years. The reduction in taxes was about 15%. Not surprisingly, the value of my house according to Zillow dropped below the value of my neighbors with similar houses.

Then about 2 years ago the township came back in and "re-assessed" my property and the taxes went back up even higher than the previous levels. A recent check on Zillow shows my house is again worth significantly more than my neighbors with similar houses.

While Zillow leads you to belive they have some sort of magic foo foo dust formula to establish house values, I believe value is primarily base it on the assessed valuation.
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Old 03-05-2014, 09:08 AM   #24
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Would be interesting to see the algorithms that Zillow uses. I used to think that the estimates varied by sales area, or county, or metro statistics, but after checking the same houses for a period of time, there doesn't seem to be a correlation. Our own home Zillow estimate has changed in value by 20% to 30% both up and down four times from a year ago, but that change does not apply to homes in the same area, just a mile or two away.
We did notice a huge drop in our estimated value after a home in our retirement community was sold (basically given away) by the heirs. This changed by almost the same amount when another nearby home sold for the "going" price a few months later.
Hard to believe that estimates could be micromanaged at the neighborhood level.
Siince Zillow or similar sites are being used increasingly for estimates, are we coming to a point where buying and selling houses could approach the advice given by Kelly Blue Book or Edmunds for car prices?

While the actual asking and sales prices are noted for "listings"... the estimates for houses that are not for sale now, will have historical estimated prices in the history chart.

On the one hand, I can see benefit for those looking to buy in a location that they are familiar with, but in cases where people are making major relocations,
and are limited in the time available to select a home.

This may seem like a non-starter, and that sensible people wouldn't use Zillow as a buying guide, but my own son and DIL are scanning Florida communities using Zillow, and will spend about 2 weeks in looking around on site. Our concern is that some of the communities show artifically high asking prices... limited realtors... limited offerings, while others are more accurate, ie. The Villages.

Not to say that there is a better way, but to realize that when it comes to dollars and cents, not a substitute for being there, and spending time to "know" the territory.
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Old 03-05-2014, 09:28 AM   #25
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I just checked my home value on Zillow and Trulia . That was good for a morning chuckle . The estimates vary by $200,000 with Trulia being the low ball . Trulia also had a picture of my house which has three stories and next to the picture is the listing that states one story .They also have the age and size of home wrong .
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Old 03-05-2014, 10:57 AM   #26
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Quote:
Originally Posted by Tom52 View Post
I think the prices you see on Zillow are pretty much based upon the property taxes you pay, (assessed valuation). I can use my existing house as example. About 5 years ago I found out that I was paying significantly more in property taxes compared to neighbors and Zillow showed my house valued above all other similar houses within several blocks.
It may have something to do with it, but that surely isn't it. My assessed valuation has barely changed since we bought this house 2 years ago. Yet, in the last 14 months Zillow says the house value has increased 30%! (This is in Texas where property sales data isn't public, BTW).
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Old 03-05-2014, 12:34 PM   #27
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Our estimated home value remains unchanged. Our daughter living in San Jose, CA has seen price increases by >50%. They blame people are hurrying to buy in fear that price will significantly go up later and flippers with cash (e.g., Chinese from Mainland) -- not to mention those with big salary, bonus, and stock options from high tech companies (i.e., Google, Facebook, Linkedin, etc). These people are paying more than asking price.
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Old 03-05-2014, 02:04 PM   #28
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Our estimated home value remains unchanged. Our daughter living in San Jose, CA has seen price increases by >50%. They blame people are hurrying to buy in fear that price will significantly go up later and flippers with cash (e.g., Chinese from Mainland) -- not to mention those with big salary, bonus, and stock options from high tech companies (i.e., Google, Facebook, Linkedin, etc). These people are paying more than asking price.
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Same with my area just outside of Beverly Hills in LA. Places are receiving multiple bids and going above asking.
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Old 03-05-2014, 02:45 PM   #29
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I think that is happening around us as well. From what I've heard, demand is pretty high and lots of places are going for above the list price.

While I'm not contemplating a move, I think eventually in a couple of years my problem, so to speak, will be a sort of reverse downsizing. We have a small house on a 1 acre lot, equestrian zoned, and want to move to the beach. That'll mean a somewhat larger house on a much smaller lot in a higher priced area. Not so much interested in a mortgage after being debt free for 12 years. Just kind of eyeballing the sitch. Plus the culture shock of moving from Aztlan to beyond the Orange Curtain.
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Old 03-05-2014, 03:00 PM   #30
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Since I am not selling, I guess it doesn't matter, and it's only Zillow estimates, but since the beginning of the year my home is up 14.2%. That is a lot regardless.
My guess is a sudden jump in prices at this stage of the recovery points to distressed sales are having mush less impact on the "good" housing stock. It's not that the house increased in price, but that foreclosures are no longer pulling it down so much. It's a good sign for the neighborhood real estate values.
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Old 03-05-2014, 03:10 PM   #31
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Our estimated home value remains unchanged. Our daughter living in San Jose, CA has seen price increases by >50%. They blame people are hurrying to buy in fear that price will significantly go up later and flippers with cash (e.g., Chinese from Mainland) -- not to mention those with big salary, bonus, and stock options from high tech companies (i.e., Google, Facebook, Linkedin, etc). These people are paying more than asking price.
Sounds about right. I am looking to buy on the Peninsula and I can't believe what some people will pay to buy here. A friend was outbid by a $2.5M cash offer on a property with a $1.5M asking price.
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