Thursday, February 09, 2006

Mixed results from Zillow

I'm really irritated. I just looked up our house on the newly launched, 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


Judy said...

I don't know anything about property valuation in Michigan or anywhere else, but in Texas we have Appraisal Districts (that's where my husband works). They are a government-formed entity that assesses personal and real property for the sake of taxation (property taxes, school taxes, county/city taxes, etc). So, I just did a check on all the houses we've ever owned, and they are all right on the money. Our value on there is to the dollar the same as our county tax appraisal. They must be using our public records for their Texas stuff!

Patty said...

I looked up our home and noticed that the information on the house was very outdated. It had the square footage - before - the addition of the florida room and family area in the kitchen. So it's really suspect what the criteria is for their 'zestimate'.

According to some listings that I was sent me about homes in your area a couple weeks ago, prices have not gone down as far as what their 'listing for' - what we don't get to see is what they are actually selling for.

As reported, the market in our area is making a huge sucking sound. If we wanted to see rightnow, we probably wouldn't get what we have put into our home- unless we really got lucky. I still go through open houses and it seems that the homes that are in mint condition and show with great curb appeal and are the ones that sell slightly lower than the listing price.

So don't despair. Someone had a good idea for a website - but didn't realize that assessing the different areas of the country could be almost impossible using some simple calculation based on outdated records.

After I looked up our address this morning, I went back to look at more details and the website was down because of too much traffic.

Jessie B said...

We questioned the same thing so we ran a test to check current listings and recent sales vs Zillow estimates. Some results were off by as much as 27% but generally they were with 2-3% on average in Southern California. Check out the data and charted results at:

Bossy♥'s YOU said...

I came here via Kendra..wanted to stop and pay you a visit..

I loved in Michigan 29 years..I know all too well of what your talking about..

I have a house there I have been trying to sell for over a year..dang market is slow slow in those parts..oh well

garrett said...

My house estimated at just about what i paid for it 15 months ago. I have to assume they use public record to estimate. My house appriciated a few thousand dollars, but I just think Zillow either knows who's living there or has some inside info about a ping pong table eventually being included in the house sale. My mom has just sold a few homes in our neighborhood recently pretty quickly, don't believe the hype.

Jeremy said...

According to the site, my house doesn't exist.

Oh well. I'll continue to live in my open field.