Can You Trust Zillow’s Home Estimating System?
Back in 2009 I wrote about the home pricing website called Zillow. It was very new then and it seemed to come along at an interesting time in the housing market when, in many places across the country, home values were decreasing at an alarming rate.
Even back then I was a little bit skeptical of the site. While the property values everywhere else were drastically falling, my property values were going up anywhere from $500 to $1,500 a month. I live in central New York, and at that time we weren’t experiencing a horrible housing market. However, it was a flat market, so seeing my estimated home price increasing so much didn’t make a lot of sense. But my thought was if someone decided they wanted to buy my house and used Zillow’s estimate for it, I wasn’t going to complain.
Of course now, 3 years later, I think I have reason to complain. I’m learning more about how the system works, and truth be told, it doesn’t work on looking at comparable homes in your area. Well, let me change that up just a bit. It does look at what other homes in your area might be selling for, but that’s the only comparison they seem to use.
In my neighborhood a few homes have come up for sale. A couple of them are still on the market, but one home across the street from me was sold maybe 6 months ago. It sold for a nice rate based on the size of the house and the amount of property. The other homes, because they’re not selling, are bringing down the estimated worth of the homes of the rest of us because they keep reducing the rate.
Here’s the thing. The house across the street that sold is a small 3-bedroom home with a small plot of land in front and in back of it. I own a 5-bedroom ranch style home with just over half an acre of land and no one living behind me. I own the largest plot of land in the area as a matter of fact. The other two homes that are for sell are a 3=bedroom and a 4-bedroom, neither of which has much more land than the house across the street.
Because of these other homes Zillow shows the worth of my home almost at the level of what it was when I purchased the home back in 2000, even though I got the house at a discount. The town I live in has my home assessed around $10,000 more than what Zillow says my home is worth; how is that possible?
As with most online services, Zillow bases its estimates on everything except onsite assessments of property, what the home looks like, etc. At best it’s a tool that might give you an overview of what the house might contain; for instance years ago it had this house as only having 4 bedrooms, so I went in and adjusted that, as well as updated some other things it had incorrect. So if someone did decide to look at Zillow, at least they’ve have a better idea of the dimensions and inside of the house.
Take estimates from online sites at arm’s length. Putting too much stock into these things will either make you inflate your sense of worth or irk you for how little it believes your property is worth.