Zillow Home Estimates seriously flawed


By TechGromit   Follow   Mon, 3 Jan 2011, 9:15am   1,073 views   6 comments
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On occasion I view the Zillow's estimate of my homes worth, and firmly believe that there estimates are based on a percentage of market trends and nothing to do with actual house's actual value. Let me clarify there. Zestimate for my house is $342,500, Public Public Facts:
Sqft: 3050
Lot size: 114,127 sq ft / 2.62 acres
Property type: Single Family
Year built: 1990
Parking type: Garage - Attached
County: Atlantic
Exterior material: Wood.

Now let compare this to three neighbor's properties.

Zestimate $261,500
Public Facts:
Lot size: 287,496 sq ft / 6.60 acres
Property type: Single Family
Year built: 1989
Parking type: Garage - Detached
County: Atlantic
Exterior material: Wood
# Stories: 2

Zestimate $442,500
Public Facts:
Sqft: 2,950
Lot size: 261,360 sq ft / 6.00 acres
Property type: Single Family
Year built: 1997
Parking type: Garage - Attached
County: Atlantic
Exterior material: Wood
# Stories: 2

Zestimate $648,500
Public Facts:
Lot size: 261,360 sq ft / 6.00 acres
Property type: Single Family
Parking type: Garage - Attached
County: Atlantic
Exterior material: Wood
# Stories: 2

Based on public facts, there no way they can determine a high end home from a slum. Have a larger lot or more sqft. doesn't make your house more valuable. In short they are using the figure the house last sold for and using a percentage off to determine value. So say I paid 450k for my house instead of 400k, the house would be more valuable in zillow's opinion, cause the initial price was higher.

Also changing the house facts does nothing increase the value of property, I added 6 bedrooms, 4 bathrooms, upped the sqft. to 8,000 sqft. along with other upgrades for the hell of it and it changes the owners estimate none. Adding remodeling projects does increase the owner estimate appraisal, but it's all at cost of the projects. So assume you remodeled a bathroom (which I did) and do all the work yourself and it costs you $1,000, it makes the house worth $708 more, but if you pay someone 4k to do it for you, it's not 3k more valueable.

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  1. Clarence 13X


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    1   10:08am Mon 3 Jan 2011   Share   Quote   Permalink   Like   Dislike  

    Would you say we can use Zillow to track trends in housing prices similar to how some do with the Case-Shilller trends?

  2. Done!


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    2   12:38pm Mon 3 Jan 2011   Share   Quote   Permalink   Like   Dislike  

    Of course Zillow is not accurate.

    The norm here in my town is smaller houses fetch less per sq ft than larger houses.
    In the area I bought the average house is 800 to 900 sq ft. These houses have fallen to as low as $69 a sqft.
    These houses are so low, because the house is small. People want bigger houses. It's still a desirable location, so larger houses are worth much more than that up to $89 to $97 a sq ft. Especially being rare, as houses more than 1700 sq ft make up less than 15% of the over all houses. It takes a while before one comes up for sale, I waited 3 years to get mine.

    So while a 900 sq ft house here is and should be worth 63K, a 2000 sq ft home is worth 178K@$89(or more) just as easily as it would be worth 138K at only $69 sqft.

    Zillow doesn't take into account Location either. You'll see a row of houses on a Canal with ocean access, with the same value as the houses across the street, not on a canal.

    I just use Zillow to ogle at the other stats. Price is not a factor I pay attention to. The guy that sold this house to me, made that mistake.

  3. ¥


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    3   1:04pm Mon 3 Jan 2011   Share   Quote   Permalink   Like   Dislike  

    zillow could pay 100 Indians to appraise 1000 properties a day each, covering 30 million properties a year.

    but mucking with their BS algorithms is much more scientific.

  4. EightBall


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    4   1:16pm Mon 3 Jan 2011   Share   Quote   Permalink   Like   Dislike  

    Zillow is worthless for price comparisons. Data disappears frequently (sale prices/changes) and is often wrong (property taxes, #bedrooms). Seeing the overhead picture and the SQFT is about all it is good for. It doesn't even reliably show homes for sale.

  5. FortWayne


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    5   1:17pm Mon 3 Jan 2011   Share   Quote   Permalink   Like   Dislike  

    Zillow is just a website. Their numbers are purely advisory, not a real fact.

    You shouldn't take every number on the internet as an absolute truth. For example property values are calculated by averaging house prices within 10 mile radius. But in Los Angeles you can go just a mile and move from a destitute neighborhood to a high end residence. One would cost a million a house, other they would pay you to live in.

    Markets are not realistic, prices are not realistic, estimates are not realistic. The only thing that is real is what you are willing to pay for it. Go with that and that is how you will know.

  6. Done!


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    6   3:41pm Mon 3 Jan 2011   Share   Quote   Permalink   Like   Dislike  

    On stats being misrepresented that is true.
    My house is listed as a two bedroom when there's at least 4.
    It also understates the sqft by a few hundred, where other sites overstate it.

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