Profile picture for 1714Home

Your estimates are consistently low. How do you adjust your estimate to actual sales?

The zestimate for our house is $298/sq ft. You list 3 recent "nearby similar sales" that sold for $488, $452, and $434 respectively, and your zestimates for each of these recently sold houses is $195,000, $111,000, and $100,000 less that they just sold for a few months ago.  Your metrics for estimating seem to be consistently low.  Currently, I cannot take your zestimates seriously, and I tell my friends not to rely on your numbers because they are not reliable.  I am aware that home values can vary significantly, but when your own 3 comp sales are almost 50% higher than the subject house, I cannot take your model seriously.

Are you doing anything to bring your zestimates closer to actual current market conditions?

Dan
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August 02 2012 - Altadena
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Answers (7)

Profile picture for Pasadenan
By the way, Eppraisal.com usually tends to come in on the high side.

As far as I know, Zillow is the only one that checks their estimates for all recently sold in each county (where the sold data is public) each quarter and posts it.
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August 04 2012
Profile picture for Pasadenan
You might check to see if there are duplicate home details pages for your property.  Zillow's present estimating method relies very heavily on "last sold price", and weights that much higher than most alternate estimating AVMs.  But the duplicate home details pages tend to be missing that info, thus are modeled to the same recently solds, but running the models with the missing data omitted.

As for "excellent condition", if you read the "what is a Zestimate", you would realize that Zillow ignores condition in the estimates, and that you need to factor that in after the fact, and that the only variables used that somewhat catch the condition are "last sold price" (if recently sold), and "tax assessed value" (which in California is only the sold price increased 2% annual (except in some deflation years), thus still doesn't capture condition if not recently purchased).  If you appealed the tax value though, it could lower the estimates.

2007 was at the "peak of the bubble" in this area, so there are lots of assumptions regarding the rate of decline of the bubble for various market sectors (types & sizes of housing & neighborhoods).

Really, the best you can do is look at multiple sources of info, and fine tune the estimates with what ever data you can get.

I was surprised to see that the 10 year estimate trend charts for our area on the home details pages disappeared this week.  We still have the Zindex trends shown... but the monthly estimate averages was helpful data that is presently not posted.  Hopefully it will be back on line soon.
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August 04 2012
Profile picture for 1714Home
Thanks for your comments, Pasadenan, and for the other links.  The fact remains that the zestimate for our house is woefully low.  You mentioned lot size; our lot size is comparable to the 3 solds that zillow lists as comparable, and yes, $/sq ft does matter, despite what you said.  Our house is in excellent condition; there is no justification for valuing it 50% less than the 3 comps on a $/sq ft basis.  It was appraised within the past 6 months for $700,000 more than the current listed zestimate (the appraisal was for a refi).

One of the other sources you listed valued our house at a slightly higher amount than we paid for it in June 2007; the zestimate value was more than $1 million lower than the other source.  I guess there is no algorithm that will properly value every home, but zillow has proven not to be reliable, in my view, at least for our house.
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August 04 2012
Profile picture for wetdawgs
@Tina:

As an agent, you should be aware than Indiana is a non-disclosure state, so sales prices are not publicly available.     Some counties in IN apparently do disclose some of the sales information despite the over all Indiana non-disclosure status.  Zillow will only present sales prices for IN if the owner/agent cares to provide it.

I've often asked agents to provide the statistics for their CMAs after several years of experience.   The limited number I've seen have tended to be +/- 10%.    Have you compiled the statistics of the CMAs you've prepared before a house goes on the market vs actual selling price that you could share with us?


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August 04 2012
"Zillow does not use a "comparable" method for determining the estimates.  The "comparable" list is generated from the estimate instead.." Seriously? If Zillow updates info 3 times a week how is it that my neighborhood has had 2 homes sell in Feb and 1 the first of June that are still not on Zillow MONTHS later? They were all sold via the local MLS through Realtors so there is no reason the information would not be available to you. Get a Realtor to do a CMA even once a month? Well at least when a Realtor does a CMA it is accurate bases on current sold comparable homes!
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August 04 2012
Profile picture for Pasadenan
By the way, if you would like to look at some other "free" AVM's for comparison, here is a partial list:
Realestate.com/homepricecheck

homes.com

Homesand.net

Eppraisal

realquest.com express

cyberhomes.com

trulia

chase

homegain

(I tend to come back to this one, not only because it has more data and a published tolerance range, but it is easier to extrapolate extra information from neighboring properties and from index trends).
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August 02 2012
Profile picture for Pasadenan
50% are high, 50% are low; it uses a learning model method using the recently sold non-distressed ownership unit sales data in the county, compared to the county records data for the property, for the extrapolations.  And then the sold prices are checked against the prior estimate each fiscal quarter to check if the estimates are getting closer to market value or not.

The comparison data and recent quarter tolerance range is summarized in the "about Zestimates" link.

For more information on what the machine estimate can and cannot do, read the FAQ: "what is a Zestimate".

Zillow does not use a "comparable" method for determining the estimates.  The "comparable" list is generated from the estimate instead.  Don't forget, land value counts for something too, especially in Los Angeles county.  A cost per square foot number is "useless" in determining values.

As for trying to get closer to present market values?  Zillow calculates new estimates nominally 3 times per week using all new data that came in.  Try getting any Realtor to update their CMA even once per month!
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August 02 2012
 
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