Can the Zestimate lower the homes price?

  • September 05 2013 - US
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Answers (6)

In an ideal world, steady and uniform inflation would have no effect on rational decision-making because it affects incomes as well as prices. But in the real world, inflation does affect our psychology. People feel more optimistic when their nominal pay rises or when a neighbor's house sold for more than they paid for theirs. But in thinking about investments for the long term, we should focus on fundamentals, on real, inflation corrected values and on the economics behind them. Nonetheless, the Zestimate does not affect the value of your home.
  • September 05 2013
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Profile picture for Connie Klemme
no just as they can not raise the home prices.

some zestimates are spot on, some are so far off it's crazy, but they are nothing more than a calculated result  to represent an opinion.   Lenders and appraisers do not use them as a final "opinion value"
and any well informed buyer or seller will not take them into account either.  they can be helpful in spotting trends  but they do not set value.
(appraisals don't set value either, they simply state what is a believed value so that a lender can make a calculated risk when issuing a loan.  the value is determined by one's willingness to pay and another's willingness to accept.  
  • September 05 2013
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Profile picture for hpvanc
I don't think so. What you really have to prove, if there is proof is that Zestimates are influencing the market, not just lowering it. If you want to prove Zestimates are influencing the market, you will have to prove it with high Zestimates and failed contracts rather than low Zestimates with closed contracts.

There are a lot of sales recorded above the Zestimate at the time of sale. There are also a lot of sales recorded below the Zestimate at the time of sale. The most significant verifiable evidence I see that Zestimates are not influencing the market are properties that sit on the market for months/years with an asking price less than the Zestimate.
  • September 05 2013
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Profile picture for mferrin
No.  The market value of a home is determined by what a ready, willing and able buyer is willing to pay for a property at any given point in time.  If the Zestimate is lower or higher than market value it is typically leaving out some key component of the equation of the home.  Either it is in better condition than the Zillow algorithm guesses it is or Zillow has has not properly factored in the desirability of the location. 
  • September 05 2013
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No, but buyers and sellers will try to use them to negotiate with.
  • September 05 2013
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Profile picture for wetdawgs
No.  A Zestimate is only a starting point for comparing homes and it presented with a value range (70% confidence interval).   It does not take into account condition, and in fast moving markets seems to lag recent sales (as the date to offer to date of closing and then recording can easily be almost two months).

 
  • September 05 2013
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