How Accurate are the Zillow “Zestimates”?

One of our Realty World Brokers sent this interesting article on to me. I have sellers and buyers that frequently ask me about the values on Zillow and sometimes they are very influenced by the numbers they see. This article, written by Ryan Lundquist of Lundquist Appraisal Company, sums things up pretty well. I have seen properties that the Zillow “Zestimate” is way too high or way too low. There really is no substitute for a good appraiser or broker that knows the neighborhoods, floor plans and upgrades. Call me anytime and I would be happy to do a free comparable market analysis that gives you a real value of your property. See Ryan’s article below:

 

How does Zillow compare with 10 real appraisals?

by Ryan Lundquist on March 5th, 2013

I have people ask me about Zillow all the time. In fact, it came up last week at a discussion I led for Realtors. Is Zillow accurate? Do I use Zillow as an appraiser? Let me share 10 recent appraised values in 2013 and compare them with “Zestimates”.

1) Elk Grove Condo: Appraisal: $90,000; Zillow: $79,454 (-11.7%)
2) Rancho Cordova House: Appraisal: $172,000; Zillow $155,567 (-9.5%)
3) East Sacramento House: Appraisal: $315,000; Zillow $399,893 (+26.9%)
4) Elk Grove House: Appraisal: $262,000; Zillow: $267,676 (+2.1%)
5) South Land Park House: Appraisal: $217,000; Zillow: $273, 293 (+25.9%)
6) Roseville Condo: Appraisal: $111,500; Zillow: $113,914 (+2.1%)
7) Roseville House: Appraisal: $415,000; Zillow: $396,763 (-4.4%)
8) East Sacramento House: Appraisal: $232,000 ; Zillow: $368,000 (-36.9%)
9) Elk Grove House: Appraisal: $305,000 ; Zillow: $264,340 (-13.3%)
10) Del Paso Heights House: Appraisal: $65,000 ; Zillow: $76,348 (+17.4%)

                       

Is Zillow accurate? It’s hit and miss. Ultimately I don’t consider Zillow to be reliable. As you can see above, some of the values were really close, but others were not close at all. An online valuation site cannot possibly know the idiosyncrasies of a real estate market – not to mention interior condition, level of charm or quality of updates either. Sometimes tract neighborhoods with a high level of data seem to have more accuracy on Zillow (not always true), while neighborhoods where each street and house are different can be very far off (even hundreds of thousands of dollars off the mark). For instance, in Yolo County data can be very sparse, so an online “valuation” without actual data isn’t all that compelling. I would say if you use Zillow regularly, use it for what it’s worth, but understand its limitations.

Do I use Zillow in my appraisals? I never use Zillow to guide or support values in my reports. Sometimes out of curiosity I will check Zillow because I wonder how a lender might view a property if they run an AVM (Automated Valuation Model).

By the way, I don’t have any problem with Zillow. This post is simply written as an FYI for clients and consumers.

Questions: How do you use Zillow? Any comments or stories to share?

If you have any questions or Sacramento home appraisal or property tax appeal needs, let’s connect by phone 916-595-3735, email, Twitter, subscribe to posts by email (or RSS) or “like” my page on Facebook

Well done Ryan!

 

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