Profile picture for livingwest

How can a Zestimate be 25% higher than the current sale price of the house?

  • May 07 2009 - Menlo Park
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Answers (4)

Profile picture for livingwest
I should have been a little more specific. Within a day of the recorded sale of a house (when it did show at the sale price), the Zestimate for that house jumped 25%. So it seems that the algorithm used by Zillow allows for 25% increases within one day, which didn't seem logical to me - I actually would think the starting price would be the sale price of the home. Price inflation certainly occurs, but that level (25% in a day) I don't believe is possible in the real world.

So in this case, regardless of whether the Zestimate is too low or too high, the value of the house was the sale price, and I assume would be reflected in the Zestimate (another note - no other sales in the immediate area were recorded on the same day).
  • October 06 2009
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Profile picture for lawsonjames
"Tsuru" over in Seattle Bubble comments,asked me for a comparison of Zillow Zestimates vs. Closed Sale Pricesin the current market.  To be sure the Zestimate isn't picking up therecent sale, I'm using the latest 50 or so sales recorded in the mlsfor King County in the last few days.  42 are single family homes and 8are condos. I'm only showing the data for the single family homes, butthought you'd like to know the breakdown of the sales for the last fewdays.
  • October 01 2009
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Profile picture for space_acer


Living ... your in Menlo Park im a few miles from you.

If you had zillow back in 1999 you would have seen price inflation far higher than zestimates could capture "real time".  Prices were going up 20-25% year over year.

Today prices are falling far more faster than the back office processing.

Down the road we will be at equilibrium. 
  • May 07 2009
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It happens. The Zestimate is definitely not the end-all be-all when figuring out what a home is worth. It's a starting point, arrived at via computer algorithms that have never been inside the specific home.
Sometimes in a case like this, the asking price is too high. But sometimes the Zestimate is too low. Or both can be the case.
  • May 07 2009
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