Skyrocketing Zillow Estimate For My House
June 12, 2014 11:10 AM Subscribe
Holy crap. My house value has been creeping up since the bust, which was to be expected. But I just checked Zillow, and they've boosted its estimated value by 23% in the past 30 days (I'm in Westchester County, not far from White Plains).
So is this:
1. Just representative of Zillow's random imprecision (I haven't noticed crazy jumps before, but I don't check often)
2. Data adjustment (i.e. maybe a few nearby homes sold recently for way more than expected, causing Zillow to adjust its assumptions),
or...
3. Evidence that another crazy housing bubble might be forming (or perhaps just a local one in my neck of the woods, which isn't all that interesting, really)?
So is this:
1. Just representative of Zillow's random imprecision (I haven't noticed crazy jumps before, but I don't check often)
2. Data adjustment (i.e. maybe a few nearby homes sold recently for way more than expected, causing Zillow to adjust its assumptions),
or...
3. Evidence that another crazy housing bubble might be forming (or perhaps just a local one in my neck of the woods, which isn't all that interesting, really)?
Response by poster: Just checked neighboring homes....Zillow estimates are up a much more modest 5 - 10 %
Is there a secret buried treasure chest under my house which Zillow just found out about?
posted by Quisp Lover at 11:15 AM on June 12, 2014
Is there a secret buried treasure chest under my house which Zillow just found out about?
posted by Quisp Lover at 11:15 AM on June 12, 2014
Best answer: Are Zillow's Zestimates full of Zhit?
posted by backseatpilot at 11:19 AM on June 12, 2014 [5 favorites]
posted by backseatpilot at 11:19 AM on June 12, 2014 [5 favorites]
Check the comps. You never know. See what else is for sale in your neighborhood and check out what their asking prices are.
Zillow isn't all that reliable, it's just an amalgam of data, simply parsed. My house on Zillow only had 1300 Sq Ft, which under-represented the size by 1/2. The basement was a full, walk out, but because it was below grade, the DeKalb county tax rolls didn't count it for tax purposes. But it was 1300 usable square footage and I got WAY more when we sold the house.
It's interesting, but it's not science, economics or the market.
posted by Ruthless Bunny at 11:22 AM on June 12, 2014
Zillow isn't all that reliable, it's just an amalgam of data, simply parsed. My house on Zillow only had 1300 Sq Ft, which under-represented the size by 1/2. The basement was a full, walk out, but because it was below grade, the DeKalb county tax rolls didn't count it for tax purposes. But it was 1300 usable square footage and I got WAY more when we sold the house.
It's interesting, but it's not science, economics or the market.
posted by Ruthless Bunny at 11:22 AM on June 12, 2014
If you want some sort of confirmation use a tool like Redfin or trulia to look at recent home sales in your area for some comps. It's a much more accurate mechanism then zillow.
posted by bitdamaged at 11:23 AM on June 12, 2014 [3 favorites]
posted by bitdamaged at 11:23 AM on June 12, 2014 [3 favorites]
Find a house very similar to yours and in the same neighborhood, that sold in the last 90 days. That selling price is a decent estimate of your house's value.
posted by COD at 11:45 AM on June 12, 2014 [1 favorite]
posted by COD at 11:45 AM on June 12, 2014 [1 favorite]
Your house's value is what someone is willing to pay you for it.
Not necessarily so.
Someone was recently willing to pay me my asking price, but the house didn't appraise for the asking price, so I had two choices: lower my asking price to the appraisal amount, or kill the deal and try to get a new buyer and hope that the next appraisal would meet my asking price or at least come closer.
Due to the timing of buying another house, I chose option A, kept the deal alive and knocked $13k off my price.
Never seen a happier buyer in my life.
Me, not so much.
posted by John Kennedy Toole Box at 11:55 AM on June 12, 2014 [7 favorites]
Not necessarily so.
Someone was recently willing to pay me my asking price, but the house didn't appraise for the asking price, so I had two choices: lower my asking price to the appraisal amount, or kill the deal and try to get a new buyer and hope that the next appraisal would meet my asking price or at least come closer.
Due to the timing of buying another house, I chose option A, kept the deal alive and knocked $13k off my price.
Never seen a happier buyer in my life.
Me, not so much.
posted by John Kennedy Toole Box at 11:55 AM on June 12, 2014 [7 favorites]
Are there any new developments in your area that may have thrown their algorithms off? An abandoned or disused area or new development could take nearby prices from what the larger lot sold for to what the individual subdivided lots are going for, which could throw the prices off for the surrounding area because of the sudden price jump.
posted by The 10th Regiment of Foot at 12:02 PM on June 12, 2014
posted by The 10th Regiment of Foot at 12:02 PM on June 12, 2014
I almost wonder if it could be something like this at work. In any case I would hardly consider Zillow authoritative or reliable.
posted by mstokes650 at 12:17 PM on June 12, 2014 [2 favorites]
posted by mstokes650 at 12:17 PM on June 12, 2014 [2 favorites]
Your house's value is what someone is willing to pay you for it.
Not necessarily so.
Yes, it is so. JKTB's example doesn't negate the principle. His buyer, apparently, was willing to pay the asking price contingent upon the appraisal. That's a big contingency.
But value = price. People often confuse value with other things (emotional attachment, past value, future value, costs + expected profit, etc). But the only meaningful measure of anything's true value is the price it will fetch on the market.
posted by LonnieK at 12:29 PM on June 12, 2014
Not necessarily so.
Yes, it is so. JKTB's example doesn't negate the principle. His buyer, apparently, was willing to pay the asking price contingent upon the appraisal. That's a big contingency.
But value = price. People often confuse value with other things (emotional attachment, past value, future value, costs + expected profit, etc). But the only meaningful measure of anything's true value is the price it will fetch on the market.
posted by LonnieK at 12:29 PM on June 12, 2014
To your third scenario, a repeat of the housing bust - I've read that the next bust is predicted for around 2020, as boomers who are now in relatively large, multi-story new homes reach an age where they want simpler, more senior-friendly homes, and a glut of these larger homes develops. In my neighborhood, many of the buyers of these ostentatious homes are younger than boomers, but can all of them possibly be making the kind of salaries that are up to the prices? and if so, are their incomes secure over time? I think another major bust is very plausible, if not predictable.
posted by mmiddle at 12:45 PM on June 12, 2014 [1 favorite]
posted by mmiddle at 12:45 PM on June 12, 2014 [1 favorite]
Best answer: As a data point, the Zestimate for my home has jumped nearly 20% in the last 3 months. My wife and I send it to each other daily as a joke because now it's a 1K bump every 36 hours or so.
But I also just refinanced and the appraisal & comps I got were closer to the Zillow price in February, not today. I trust the appraiser more than the website.
However, my neighborhood (in the Chicago suburbs) has seen a significant jump in home sales and prices are starting to creep up. Inventory in single-family homes with a similar price range is nearly zero...and this is prime move-before-school-starts season.
So I'm taking it as a sign that foreclosures are finally clearing inventory and creating a small bubble in prices.
posted by JoeZydeco at 12:53 PM on June 12, 2014 [1 favorite]
But I also just refinanced and the appraisal & comps I got were closer to the Zillow price in February, not today. I trust the appraiser more than the website.
However, my neighborhood (in the Chicago suburbs) has seen a significant jump in home sales and prices are starting to creep up. Inventory in single-family homes with a similar price range is nearly zero...and this is prime move-before-school-starts season.
So I'm taking it as a sign that foreclosures are finally clearing inventory and creating a small bubble in prices.
posted by JoeZydeco at 12:53 PM on June 12, 2014 [1 favorite]
Best answer: I know that Westchester single family homes went up a lot (about that percentage) last quarter. Could Zillow be getting data from the Real Estate industry and applying it widely? I don't know anything about WP real estate specifically, though.
posted by cestmoi15 at 12:54 PM on June 12, 2014
posted by cestmoi15 at 12:54 PM on June 12, 2014
Huh. Zillow has my home price dropping by 30% since February. However their February price was delusional, nobody was ever going to pay that. I have no idea what it all means other than Zillow is pretty much useless.
posted by HotToddy at 1:29 PM on June 12, 2014
posted by HotToddy at 1:29 PM on June 12, 2014
Zestimates are literally hit and miss. I own two houses, and for one the zestimate is dead on, and for the other it's laughably wrong -- like, 3x what I could actually get for it.
posted by rabbitrabbit at 1:33 PM on June 12, 2014
posted by rabbitrabbit at 1:33 PM on June 12, 2014
Best answer: When I was using Mint, which can check zillow and update the value of your house constantly, I was very interested to see how the value of my house fluctuated. Sometimes I could connect it to something specific that happened in the neighborhood; for instance, when a foreclosure two doors down that had been gutted and had holes knocked in the walls so the pipes could be stolen sold, my home's "value" according to Zillow suddenly dropped over $40,000, because the selling price on the foreclosure was so low due to the damage. I can't speak to anything more broadly but in our case it seems like the Zillow algorithm overreacts sometimes.
posted by not that girl at 2:01 PM on June 12, 2014 [1 favorite]
posted by not that girl at 2:01 PM on June 12, 2014 [1 favorite]
Zestimates are useless and inaccurate. If you really want to know what your house is worth, look for comparable sales in your neighborhood and/or consult a real estate agent.
posted by tckma at 2:46 PM on June 12, 2014
posted by tckma at 2:46 PM on June 12, 2014
Response by poster: This from JoeZydeco sounds like it explains at least some of it:
foreclosures are finally clearing inventory and creating a small bubble in prices
posted by Quisp Lover at 3:22 PM on June 12, 2014
foreclosures are finally clearing inventory and creating a small bubble in prices
posted by Quisp Lover at 3:22 PM on June 12, 2014
Response by poster: mstokes650, I don't think that's it, but I loved your link enough to earn it a "favorite"!
posted by Quisp Lover at 4:49 PM on June 12, 2014
posted by Quisp Lover at 4:49 PM on June 12, 2014
This happened to my house a couple years ago, but it was the opposite direction. Zillow had a post on their site that said "We changed our calculation mechanism" and that was all I got out of them.
posted by getawaysticks at 4:54 PM on June 12, 2014
posted by getawaysticks at 4:54 PM on June 12, 2014
Zillow is useless. My husband has been in real estate for decades, and I work in the field myself, and agents are constantly frustrated that people think Zillow is any good at all at setting value. if you want to know what your house is worth in today's market any agent will happily do a free CMA for you.
posted by St. Alia of the Bunnies at 6:51 PM on June 13, 2014
posted by St. Alia of the Bunnies at 6:51 PM on June 13, 2014
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posted by dfriedman at 11:13 AM on June 12, 2014 [3 favorites]