• Using Zillow to Compute Your Home's Value? Read This and Think Twice

    Ok, so if you’ve ever used Zillow, you know that it’s a fun toy to see how much your neighbor/boss/co-worker/doppelganger’s house is worth.  Is it completely reliable? Let’s just say, it’s a starting point

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    Case in point. I was curious what Zillow thought the average $ per square foot was in Edgewood Park.  I first did it by myself, using comps of recent sales in Edgewood Park, in the last couple quarters — typically how we realtors would arrive at a value in order to assess what a home might be listed at.  Give or take a few bucks, in Edgewood Park, that amount is $602.

    Now, looking at Zillow, their estimate is $572.  Now, I’m not surprised, given that I’ve seen Zillow be completely off base around 10% either way, many times. What’s perplexing is that their algorithm to get their value can sometimes use recently sold houses that have absolutely no business being part of the computation.

    Here’s an example: I looked at the Zestimate (Zillow’s branded estimate) of an Edgewood Park home, and here’s just some of the comps they used:

    • 64 Belvedere, San Carlos
    • 2031 Eaton, San Carlos
    • 256 Ruby, San Carlos
    • 126 Inner Circle, Redwood City (over in Mt. Carmel area)
    • 1432 Roosevelt, Redwood City (south of Jefferson)
    • 938 Lupin, San Carlos (a CONDO)

    28 out of 50 of the comps they used were in San Carlos. Ok, so I know Edgewood Park is on the border of San Carlos, but it makes no sense to me to use those as comps.  San Carlos is a different animal than Redwood City, and very different from Edgewood Park…smaller houses, smaller lots. 

    Zillow can be an interesting, useful, sometimes voyeuristic tool, but take that example above to set your proper expectations.

    This entry was posted on Thursday, March 20th, 2008 at 5:28 pm and is filed under Real Estate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
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