I'm really irritated. I just looked up our house on the newly launched Zillow.com, and according to their estimate it is worth less than we paid for it in 2004, which I find extremely dubious.
Zillow can never hope to understand individual local markets, despite being able to access reams of public data. Instead, it might have the effect of unfairly devaluing homes during the sale process. The 'value estimate' Zillow provides for our house has a range of $68,000, meaning our home could be valued (according to them) anywhere in that range. The high, which is less than I believe our house to be worth, is $16,000 more than we paid, the low is $43,000 less.
Zillow helpfully theorizes that our home has depreciated $23,000 since last August, I guess based on the lousy Detroit housing market as a whole. It does not take into account any improvements made to the property unless you go through a complicated process where you input them individually, as well as their cost. Since most of the improvements to our home were made by the last owner, I have no access to the cost data, making anything I put into the calculator a SWAG.*
Zillow can't account for being able to walk into downtown Birmingham, teardown new construction creeping in our direction, and an aging neighborhood where some homes are just starting to be listed on the market for the first time in decades. Until it has a calculator for that, I'll stick to the comp sheets.
UPDATE: I checked on our old block where we rented in downtown Birmingham, and Zillow lists home values ranging from $184,000 to $1.47 million. One one block. Is that even possible? See for yourself. Interestingly, the three houses next to each other at 1.47, .878 and 1.45 million - all the same design. Are there $592,000 in differences between the cabinets and counters in these houses? This just doesn't compute.
UPDATED UPDATE: Listed for $839,000, Zillow says $878,351. Listed for $449,788, Zillow says $363,298. Listed for $425,000, Zillow says $401,691. Does this seem ready for primetime?
*Sophisticated Wild-Ass Guess