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Why zillow estimate went down so much?

Why did zillow market estimates in York and Spring Grove, PA go down Between 10,000 and 20,000? Is there a mistake in formula. That's a lot? What's happening? Please find out why?
  • May 04 2014 - Spring Grove
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Answers (2)

Profile picture for blank screen EXILED
Looked up the index trends for both York Township, and Spring Grove, using the "local info" link at the top of the page:





As expected, neither trend shows the "changes" that you referenced.  Due to limited number of sales, individual estimates fluctuate a lot; but the trend, which is the median of the estimates in the area, tends to be much more stable.

You can't get any idea of market movement from the individual estimates, without looking over a long time frame and "smoothing" (such as taking the 12 month running average, and then shifting that back in time 6 months to align with the middle of the average time period).  The index trends give a much clearer picture of market movement in an area.  That is the whole point of generating individual estimates; to use for generating index trends comparable to Case Shiller, on a much finer geographic level than Case Shiller can offer.
  • May 04 2014
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Profile picture for blank screen EXILED
The tolerance margin is quite wide:
http://www.zillow.com/howto/DataCoverageZestimateAccuracyPA.htm

A 70% confidence interval is posted with each estimate:
http://www.zillow.com/zestimate/#faq-1  (30% probability that the present market value is NOT within the posted range... much better odds than Roulette or Lotto).

Though Zillow has been asked multiple times to explain the wide fluctuations, they have not attempted to do so, believing the tolerance margin fully covers the issue.

It is a "statistical process" that requires statistical interpretation; NOT an appraisal nor CMA.
http://www.zillow.com/zestimate/#faq-5
Read through the rest of their FAQ on the Zestimates for a better understanding of their limitations.
http://www.zillow.com/zestimate/

The modeling is based on county records of what recently sold.  In the U.S., there is no "fixed pricing".  So there is an extremely wide range of what people will pay for similar, and no simple way to measure what is similar without site visits.

When you figure out why some people pay $235 for a pair of "designer jeans", when someone else buys essentially the same pair of jeans made in the same factory with the same materials and pattern.. for only $12; let me know.  That is the U.S. "capitalist economic system" for you.
  • May 04 2014
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