How long has it been since Zillow has been around? I don’t remember just when it hit the scene, but I think it was about a couple of years ago, at the peak of the market. There was much wailing and gnashing of teeth in the media, that this was just one more step in the obsolescence of Realtors. Well, if you ask me, our death has been greatly exaggerated.
When Zillow first came out, I noted that it was often times very inaccurate. If you are going to sell your house, it’s important to have a realistic idea of how much you can expect to get for it. There’s a big difference between $500,000 and $550,000. Sure, that’s “just” 10% but is just 10% of the sale price – that $50,000, though, is likely to represent, perhaps, 100% of the actual profit that the seller makes when the home does sell. Therefore, it’s important to know if that profit will actually materialize, or to know if there’s no profit to be had…or worse, if the owner is actually going to come up short on the sale of the home.
I actually use Zillow all the time. I even advertise on there. I think it’s a nifty, fun web site and I often use it to spot-check prices. When Zillow first came out, I figured that its accuracy would improve over time, as they fine-tuned the algorithms that they use. Unfortunately, this does not appear to be the case. In today’s market, their “Zestimates” (Zillow’s estimation of a property’s value) are often times way out of whack. Check out this screen shot:
This is a listing I have now in Watsonville – it’s on the market at $329,900. The list price is pretty low – but even so, my phone isn’t exactly ringing off the hook with enquiries about the property (although I have had some interest). You could practically buy this home and the payments would not be so much more than if you were renting it, but even so, it may end up selling for less than its current asking price.
But what does Zillow have to say? Zillow says it’s worth $653,784. Zoinks! And this is by no means an isolated incident – I see this time and time again. So what is Zillow good for, then, if it often fails to miserably at its primary objective? One thing that I like to use it for is that it shows trends:
Here, too, the data is not exactly accurate, but it’s at least closer t the mark, and it does help show, at least, the general direction of the market.
Go ahead and use Zillow. But please, don’t go quoting its Zestimates chapter-and-verse. If you need to know the value of any piece of Santa Cruz Real Estate, I invite you to head over to My Home Valuation Tool and request a Home Price Report, which will be lovingly prepared exclusively for you – by me. It’s the best way to get a realistic number for the value of your home.