Profile picture for sacree1

A home in St Louis is on the market for $399,000 and the zestimate is ~$280,000.What does this mean?

I am looking to buy a home in the Central West end area of St. Louis. There is a home on the market for $399,000. I asked my realtor to pull up comps but there aren't many that come up since there are ~10 such townhomes in the area and the rest are lofts, condos - which skews the comps. I checked zillow and the value is much lower (~280,000). Does that mean the home is way over priced?
  • July 19 2009 - Central West End
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Answers (5)

Profile picture for sunnyview
I do not know your market in SL, but you asked about tax abatement affecting the Zestimate. I can tell you that a lower assessed value can effect the Zestimate. When I appealed my taxes and my real market value was lowered by my request, my Zestimate dropped significantly. I do not know for sure if an abatement would have that same effect, but it might especially since the assessor might wait to do a reassessment of real market value until the house came off of abatement.

Valuing a property in any market is difficult without having comps. In this market, you have to be careful and look at all the numbers that you can get even for comps that might be older than could be used on an appraisal. You can use the trends form the MLS in your market to estimate the value of this property based on the last available comps adjusted for changes in your local market. Your realtor can help you do this. An appraiser will have to find comps of some kind to be able to do an appraisal so comps will continue to be an ongoing issue through the loan process. With a good realtor, good appraiser and solid lender, it should be workable though.
  • July 20 2009
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It appears the zillow "guessetimate" missed the mark again.  Here's another example: 4418 West Pine sold 7/9/9 for $600k while zillow's estimate is $434k.  A couple things to keep in mind are that appraisal is as much of an art as it is a science and zillow's computer modeling works wonderfully in cookie-cutter neighborhoods with recent sales activity.  Finally, there is a difference between "price" and "market value" although (in my opinion) a good agent - in a good market wouldn't be more than 10% off the mark.  I'll agree w/ Stephanie - let your Realtor guide you - if the sale price indicates market value the appraiser will find appropriate "comps" to support their independent value estimate.  Hopefully, the stars align.  
  • July 20 2009
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Profile picture for stephhug
I don't think the tax abatement would come into play with their estimate. These estimates, by Zillow's own description are estimates only with a large margin of error. They are not meant to replace the pricing advice of a real estate expert or appraiser. If you have seen other properties in the area and price range, you should have a good handle on area values and whether or not you think this property is worth the price. 

I think I know what property you are actually talking about. Another factor comes into play, particularly in the city. You and I know which blocks are desirable, and thus more expensive. Zillow does not. They pull comps from the whole area but do not take into account if one is on a bad street and one is on a great street. Or the comps can be  similar in size, but one is new and gorgeous with high end updates and another is older and very dated.


My personal home is in the Central West End and in 2009 the Zestimate for my home has fluctuated $75,000! doesn't mean my home value has actually changed, just the data they are pulling from has varied.


Bottom line, trust your agents and appraiser's opinion (and your own instinct) rather than a third party website. They haven't seen this townhouse or even visited St. Louis!

Good luck! If this the townhouse on Laclede? Its a really nice property (though I would estimate its value to be more like $375,000) 
  • July 20 2009
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Profile picture for sacree1
Thanks for the response - the construction of this home happened in 2000 and it was tax abated for 10 years - so its close to getting out of the abatement. Could that be a reason for low zestimate?

Thanks again...
  • July 20 2009
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It could mean that; or it could be that there have been substantial improvements completed since the last market sale of the property or it could mean the st louis city assessor is not aware of all the features/full size of the home;  your realtor should be able to give you a fully educated reason...
good luck.
  • July 19 2009
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