I’ve been getting asked a lot about the Zillow Zestimate lately. Here are a few of my thoughts. As you may or may not know, the Zestimate is created by using an algorithm that compares your home to others that have recently sold in the area. While this algorithm does take square footage, bedroom count, and other market data into account, there are many things that it doesn’t. “ Zillow is fun, but it’s not very accurate. ” Things such as remodels, roof condition, the view, and the neighbors all have an impact on the home’s value. The Zestimate takes none of this into account. Zillow even said that the Zestimate is just a tool and shouldn’t be relied upon to determine a home’s value. It’s right on their website. Even the CEO of Zillow had his home overvalued by 40%. I like Zillow and I’m sure you do too. It’s a fun way to browse homes. However, if you’re trying to determine your home’s true market value, give me a call or send me an email. I would be happy to help do that for you. I look forward to hearing from you soon.
Most consumers probably are not aware of this, but our local MLS just went through a fairly large upgrade. The implementation left a lot to be desired, with the CEO of MLS Listings issuing a public apology for the blunders. One of the new features of the upgraded system is a new status for listings: “Coming Soon.” The Coming Soon feature was created to help stem the tide of off-market real estate listings, which has been increasingly common in recent years. By listing a home as “Coming Soon,” the listing will only be available to MLS subscribers (that is, Real estate agents, appraisers, etc.). The listing will not be visible to consumers via Zillow, Trulia, and other “syndicated” web sites, and the system will not even allow a Coming Soon listing to be emailed out by a subscriber. When a home is listed as Coming Soon, it may remain with this status for only 30 days. At the end of 30 days, if the listing is not marked as “sold” or moved to “Active” status, the MLS will automatically withdraw the listing. During the “Coming Soon” period, the days-on-market for the listing will not accrue, and if it is moved to Active status, it will come on the market as a brand-new, just-listed home. Why would a real estate agent choose to use this new Coming Soon status, rather than listing a home immediately onto the MLS for all the public to see? I am in a situation like this right now: I just signed a … Read More
The Internet is swimming in offers for free, instant home price valuations. They’re all over Google search results, Facebook, Craigslist, and just about every Realtor web site. You can look up a home’s value on Zillow, eppraisal.com, and thousands of other sites which promise instant, online and accurate real estate valuations. But the truth is, there’s much more to know about your home’s value than you can get in any home price valuation. I’m here to tell you the dirty truth about home price valuations. I have performed literally thousands of home price valuations (aka CMA, or Comparative Market Analysis) over the years I’ve been a real estate broker. I’ve done them for all kind of properties, and in all kinds of markets. I’ve done exterior-only, full interior valuations, value estimates for mobile homes, commercial property and raw land valuations – the works! I feel very comfortable valuing property, and I think I do a pretty good job of it. But here’s the dirty truth about home price valuations: your home is not worth any one particular price. Rather, it is worth something within a range of prices, and could sell anywhere within that range. If anyone could reliably and consistently tell you exactly how much any particular property would sell for at a particular point in time, that person would be fabulously wealthy. It’s tantamount to having a crystal ball and being able to accurately prophecy the future. You see, a home price valuation is based on a whole series of assumptions about the state of … Read More
While searching for a blog topic, two reports spanning the good/bad news spectrum caught my eye, because Zillow.com had a hand in both. To check out a Zillow-backed report showing the relative strength of the South Bay housing market, CLICK HERE. To check out a different Zillow-cited report showing how home values and negative equity are still headed in the wrong direction, CLICK HERE. Zillow is good for a few things, and not particularly good for others. They track housing statistics, and have some very detailed market reports that can be fairly telling. Their site also has all of the latest mortgage rates, and other helpful tools for buyers and sellers. Housing statistics simply report what has already happened, and there isn’t much room to screw that up. Yet where Zillow use can get dangerous is when people treat it like the Kelly Blue Book of housing, and believe what they find out. Users can plug their home’s address into Zillow and get a “Zestimate” of value. Apparently, this value is derived from some sort of algorithm involving tax record specifications of a home, and reported sales activity in the area. Sometimes, conditions are in place for Zillow to provide near-exact values. For homes that are located in complexes or communities of similar homes, sales data for the immediate area may be a strong indicator, especially if the area has high levels of sales activity. Yet for most other homes, things aren’t so simple. Often times, tax records don’t accurately report what’s on the ground, which … Read More
If there is an even number of homes sold, you take the two in the middle, you find the difference in prices, and all that difference in price to the lower-priced house (or subtract it from the higher priced house) to get the median home price. … It’s interesting to note that the Zillow blog entry talks about the OFHEO Housing Price Index – because the OFHEO housing price index is probably going away now, since the OFHEO (Office of Federal Housing Enterprise Oversight) itself is slated to be merged into a new entity, the Federal Housing Financing Agency. … So looks like we po’ folk out here in Santa Cruz are just going to have to stick with the trusty, rusty median home price as a rough measure of what’s going on. I think it’s pretty clear by now that all housing types, in every location throughout the county, are off their peaks, some of them (south county, north county) by huge margins.