A friend of mine in Coconut Grove, FL recently wrote a post about Zillow which made me interested to see what Zillow is reporting about the values in Ortega. I found some VERY surprising information!
Zillow is honest about how accurate (or inaccurate) their data might be — they have disclaimers all over their site that discuss this. They admit that they aren’t aware of how great your interior renovations are or if your house is backs up to a busy (and noisy) roadway. They let you know that their data comes from public records and that there may be a delay from the time of a sale to when they are able to report it.
A quote from their site states “our data may be incomplete or incorrect. Also, we have not physically inspected a specific home. Remember ZEstimate is a starting point and does not consider all the market intricacies that can determine the actual price”.
Market intricacies — we all know that market intricacies are really the whole ball of wax so the fact that they don’t consider “market intricacies” says it all.
A particular house in Ortega Forest illustrates this perfectly. One screen of Zillow shows the sales price of this house followed by what they think the value might be now (the ZEstimate). If you believe this ZEstimate, then the people who bought 5058 Ortega Forest Drive in August 2009 have made out like a bandit!
This house closed for $865K in August 2009. Zillow states that their house is now worth (just four months later) $1,221,500. That sounds like the real estate boom times doesn’t it? A fat 400K profit in just a few short months? Oh, how I wish Zillow was right.
This house was listed for $1,185,000 in April 2008. I even considered this house myself because on a price per square foot basis, $1,185,000 seemed like a great price. But, once I got inside, I saw that the house had very low ceilings and a choppy floorplan (among other things) and I decided to pass.
The house was reduced to $1,100,000 just two months after being listed. It was reduced again six months after being listed to $1,049,973 (that’s an odd number). Still…no bites. This listing expired and the property was re-listed at $969,000. It finally sold for $865K in August of this year.
So….the market has shown us that no one would buy the property at $1,185,000…..or $1,100,000…… or $1,049,973…….or $969,000. Zillow tells us that they estimate the value of the property to be $1,221,500.
So now you see the problem with Zillow. They do not know the local market which is the most ESSENTIAL piece of the puzzle to have.
So, what IS Zillow good for? It’s a great place to see cool maps (like the bird’s eye view) of your neighborhood, to get an APPROXIMATION of value (although we’ve seen how far off this can be), to see the prices that some of your neighbors houses have sold for and to look at available properties for sale.
In my book, Zillow can be fun — but I’d leave it at FUN.
Buying or selling a house is serious business. If you’re thinking of buying or selling, call a realtor who knows the local market and leave the funny business to Zillow.
Thanks for reading. Please join me for my next discussion of real estate in the Ortega, Avondale and Riverside Neighborhoods!