Wednesday, September 9, 2009

Checking Zillow's Estimates

When I'm looking at what's for sale I often check Zillow to see how their "zestimate" of the current market value compares to the asking price. Evidently lots of others do too, since the site is one of the most popular real estate sites around. To check Zilow's accuracy, I looked at the five Hot Properties that sold in August and compared the zestimates on those houses to the actual current market value—how much they just sold for. Of the four houses that had a zestimate, Zillow was way under for all of them—by an average of well over $100,000 and by as much as $1,164,000! It's only four houses, but it does make you wonder how accurate the zestimates actually are. The trick, of course, is that Zillow is basing the zesitmate on the average price per square foot for the zip code. This approach misses the fact that not all square foots are equal—and that prices can vary a lot in one zip code. Thoughts?

Zestimate: $761,500
Just sold for:
$850,000
Location: Yorktown Heights
Featured: May 12, 2009

Zestimate: $666,000
Just sold for: $830,000
Location:
Mt. Kisco
Featured:
March 3, 2009

Zestimate: $986,000
Just sold for: $2,150,000
Location:
Katonah
Featured: February 5, 2009

Zestimate: $556,000
Just sold for: $770,000
Location: Katonah
Featured: October 30, 2007

3 comments:

Anonymous said...

I never trust zillow but I am shocked that they were over a million bucks off on that house! That's funny.

Anonymous said...

That just tells you that everyone overpaid!

JD said...

"That just tells you that everyone overpaid!"

No, it tells you that people are willing to spend well above average for houses that are well above average.