Author Topic: Is Zillow High Right Now?  (Read 2305 times)

Jon Bon

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Is Zillow High Right Now?
« on: June 04, 2019, 11:18:11 AM »
So currently I own 4 houses. They provide a nice little income and don't require very much work. I am happy with them overall, happy to hang onto them, and keep managing them myself for the foreseeable future.

I do have one potential gripe, and that is I think Zillow is on some newly legal drugs.  Since January my RE has increased 25%, in 5 months, 25%!! I track my net worth using mint, which pulls in Zillow values. So about 4 times a month I see huge swings in my net worth and it amazes me every time.

Now I realize this is not a real complaint, that these are purely hypothetical paper gains, and could even be seen as a humble brag. What I wanted to ask you fine folks is:
A. Are you seeing this kind of bananas increase in RE values?
B. Does that effect how you calculate your net worth?
C. Does that effect your sell/rent decision?

I have a really hard time believing I am this smart or this lucky, so is zillow just high or what?


bw_94

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Re: Is Zillow High Right Now?
« Reply #1 on: June 04, 2019, 11:40:56 AM »
Yes, the Zestimate on my primary residence seems about 10-20% over what I think I could realistically get for it, and this does impact my net worth through Mint. In my case, I also track my net worth minus primary residence, so it isn't a huge deal, but it seems high to me.

sammybiker

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Re: Is Zillow High Right Now?
« Reply #2 on: June 04, 2019, 11:47:22 AM »
@Jon Bon

A. Are you seeing this kind of bananas increase in RE values?   Yes.  In my Ohio properties, I think they are a little overvalued, my Texas properties are right on, maybe a little under valued re: Zillow vs Actual Comps

B. Does that effect how you calculate your net worth?  I try and read in between the lines a little and think about what I could actually sell it for.  I also accept that this will fluctuate as with any other paper gain

C. Does that effect your sell/rent decision?  Not for me.  I would want to see another 50%+ swing before I ever considered selling aka I'm in it for the long term cashflow & debt paydown

It's fun to watch but I try not to get too excited about it, good/bad/indifferent

waltworks

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Re: Is Zillow High Right Now?
« Reply #3 on: June 04, 2019, 12:47:25 PM »
Zillow is not very good at predicting values, unless you live in a full price disclosure state in an area with a lot of comps, and you have a pretty normal house. Zestimates jump all around all the time, because it's just an algorithm. Garbage in, garbage out.

I would personally just not spend time thinking about your house values or their contribution to your net worth until you decide to sell one or more. Then you can get an actual market analysis/appraisal done.

Short answer: no, your houses aren't worth 25% more than they were in January.

-W

Another Reader

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Re: Is Zillow High Right Now?
« Reply #4 on: June 04, 2019, 09:00:08 PM »
Zillow is all over the map.  They are too high on the Bay Area properties and above, below, or near value on the other rentals.  You can elect to use Zillow in Personal Capital to calculate your net worth including your properties.  Those values can change almost daily, based on Zillow's mood.

Just for laughs, I went through their buying process on one of the vacant rentals.  We had seen a couple where they had goofed badly and overpaid, so what the heck.  Do paint and flooring, clean up the landscaping, and this one would easily go for $250k.  Zillow estimate was $240k.  Offer sight unseen was $222k, net $206k.  The answer to why the offer was so much lower than even their estimate?  "We had an agent in the market look at comparable sales." 

In the mid priced areas of the Phoenix market, demand for under $300k houses far outstrips supply.  Houses sell in 48 hours, sometimes with multiple offers.  Prices are going up rapidly.  I don't know how Zillow incorporates that in their valuation model, but their value estimates are increasing.  I know what my houses would sell for better than most experienced agents, and I use my numbers in estimating net worth.

Jon Bon

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Re: Is Zillow High Right Now?
« Reply #5 on: June 05, 2019, 08:36:29 AM »
I have actually written my own regression a few times to basically come up with my own algorithm. With some pretty powerful stat tools being offered on the internet for free it was not all that hard. Granted this is going off of what I remember from school like 10 years ago, but it gave me what I felt were pretty good results! Zillow leans way to much on recent sales and taxable values. Both of which can be all over the map.

I guess its probably correct to say that the FMV of my houses is somewhere between: What I think they are worth and What zillow thinks they are worth.

With zillow being much higher. So if it helps me increase my 'mental accounting' for my RE holdings I guess it is a good thing. I am not going to throw a for sale sign in the yard or ask for a loan based on the zillow value of course. Sounds like zillow is basically getting into the bandit sign/yellow letter game? They will but anything, but only at like 75% of its actual value.




StarBright

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Re: Is Zillow High Right Now?
« Reply #6 on: June 05, 2019, 09:02:53 AM »
Zillow is hit or miss depending on the area. When we sold our house in NC it was correct down to the hundred dollar - but there were a ton of comps in that area.

We think it is high in Ohio. My SIL said it varied by neighborhood in the San Diego area, some areas spot on, some totally overpriced.

v8rx7guy

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Re: Is Zillow High Right Now?
« Reply #7 on: June 05, 2019, 09:29:00 AM »
It seems dead on for our Personal Residence, but feels about 10% high for our Duplex Rental in a larger city.

FLOW

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Re: Is Zillow High Right Now?
« Reply #8 on: June 05, 2019, 09:42:46 AM »
My SFH seems about 10% to high, yes.

Yes, Zillow is high right now.  N=1

SimpleLifer

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Re: Is Zillow High Right Now?
« Reply #9 on: June 06, 2019, 08:13:47 AM »
I live in the SF Bay Area.  Zillow and redfin are all over the place.  Lately I've noticed a huge drop on zillow for my area (just in the last ~60 days).

When I refi'd 4 years ago, I thought zillow and redfin were both on the high-side, but my appraisal came in at 11% more.

I keep track on my own, averaging the value using zillow, redfin, and realtor.com.

DadJokes

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Re: Is Zillow High Right Now?
« Reply #10 on: June 06, 2019, 08:40:56 AM »
I was using Zillow to track my home's net worth, but when I refinanced, they dropped the value of my home $25k to the balance of the new loan, all while my neighbor's house is listed for about $10k more than what my previous "zestimate" was.

So I don't put much stock in Zillow's value estimate.

robartsd

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Re: Is Zillow High Right Now?
« Reply #11 on: June 06, 2019, 10:26:51 AM »
Zestimate is too heavily based on recent sales nearby without enough adjustment for finish level, condition, or specific neighborhood. A newly remolded home in a nicer nearby neighborhood sells and Zestimate shoots skyward. I think the actual FMV of my home is closer to the lower end of the Zestimate range seen on the Owner View page.

Psychstache

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Re: Is Zillow High Right Now?
« Reply #12 on: June 06, 2019, 11:56:17 AM »
No, Zillow is not high right now. Zillow is always high. I have never in all my years of owning a house seen a realistic Zestimate for a home I own.

robartsd

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Re: Is Zillow High Right Now?
« Reply #13 on: June 06, 2019, 12:09:03 PM »
No, Zillow is not high right now. Zillow is always high. I have never in all my years of owning a house seen a realistic Zestimate for a home I own.
I wonder if value focused mustachians tend to favor homes that have lower FMV than these algorithms predict.

FLOW

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Re: Is Zillow High Right Now?
« Reply #14 on: June 06, 2019, 01:08:13 PM »
Off the cuff theory: If homes that are being sold are more likely to have been remodeled/updated than homes that are not on the market, you get a situation where homes being sold are going for mucho dollars because they all look nice inside... whereas homes that are not nice inside are being valued by Zillow as if they are.

That could explain why Zillow is always too high.

Psychstache

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Re: Is Zillow High Right Now?
« Reply #15 on: June 06, 2019, 01:23:28 PM »
Off the cuff theory: If homes that are being sold are more likely to have been remodeled/updated than homes that are not on the market, you get a situation where homes being sold are going for mucho dollars because they all look nice inside... whereas homes that are not nice inside are being valued by Zillow as if they are.

That could explain why Zillow is always too high.

I just bought my house in January and checked the Zestimate right after I bought it. It said my house was worth 4% more than what I just paid for it. It's just an algorithm that tends to inflate values, probably intentionally as it makes people more interested in selling their house if they start thinking they can sell it for 5-10% more than it is actually worth.

FIREstache

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Re: Is Zillow High Right Now?
« Reply #16 on: June 06, 2019, 03:28:13 PM »

I've actually looked at many houses in LCOL area on zillow, and they were reasonably valued on there, including my own.

CupcakeGuru

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Re: Is Zillow High Right Now?
« Reply #17 on: June 07, 2019, 05:10:21 AM »
The estimates really depend on what has recently sold by you. I unlinked Zillow in Mint because of the crazy fluctuations. I manually update the home worth every year or two.

Enigma

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Re: Is Zillow High Right Now?
« Reply #18 on: June 07, 2019, 07:51:53 AM »
I manually put my numbers into Mint for what I believe my rentals to be.  Their real values will not be determined unless they sell.

clarkfan1979

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Re: Is Zillow High Right Now?
« Reply #19 on: June 08, 2019, 01:01:11 PM »
I manually put my numbers into Mint for what I believe my rentals to be.  Their real values will not be determined unless they sell.

I also manually enter my rental value estimates, based on comps. For two of my rentals, Zillow is about 5% high. For my primary, it's about 15% too low.

MrUpwardlyMobile

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Re: Is Zillow High Right Now?
« Reply #20 on: June 08, 2019, 01:07:26 PM »
Zillow is not a source for estimating your net worth.  The value of your home is what you paid for it until you sell it, then itís the value you sold it for.

v8rx7guy

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Re: Is Zillow High Right Now?
« Reply #21 on: June 08, 2019, 02:02:06 PM »
Zillow is not a source for estimating your net worth.  The value of your home is what you paid for it until you sell it, then itís the value you sold it for.

In my opinion Zillow is a fine place to get an estimate for a net worth calculation. 

DadJokes

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Re: Is Zillow High Right Now?
« Reply #22 on: June 10, 2019, 06:06:14 AM »
Zillow is not a source for estimating your net worth.  The value of your home is what you paid for it until you sell it, then itís the value you sold it for.

Is the value of your investments what you pay for them until you sell them?

You should either track all of your assets at cost, or you should track all of them at market value.

NorCal

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Re: Is Zillow High Right Now?
« Reply #23 on: June 10, 2019, 06:54:24 AM »
Algorithmic estimates work well in some cases, and not so well in other cases.

You can get a pretty good idea of what Zillow is doing behind the scenes.  They're looking at comparable sales behind the scenes, and applying an average price/sqft to your house.  It isn't rocket science.

If you live in a neighborhood like mine, where houses are very similar build quality, similar age, and similar condition, Zillow works great.  I'd guess the market value for me is spot on.

In contrast, my dad lives in rural napa ca.  His neighborhood has a combination of tiny rural ranch homes and massive multi-million dollar estates.  Lot sizes are inconsistent, land is not equally desirable, and there is massive variability in construction quality.  Zillow estimates are useless there.

Use your own judgement.  I'd say you should disconnect this from Mint, and just manually update your estimates annually.

sol

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Re: Is Zillow High Right Now?
« Reply #24 on: June 10, 2019, 07:51:03 AM »
Zillow should always value your home more highly than you do.  They are estimating an auction's winning bid, which means by definition the highest price anyone will pay.  Not what most people would pay.  Not what you would pay.

I'm currently testing this theory with a house for sale, listed below Zillow's estimated value but above what all of the local realtors gave me as comps.  We shall see.

Another Reader

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Re: Is Zillow High Right Now?
« Reply #25 on: June 10, 2019, 08:47:03 AM »
Zillow should always value your home more highly than you do.  They are estimating an auction's winning bid, which means by definition the highest price anyone will pay.  Not what most people would pay.  Not what you would pay.

I'm currently testing this theory with a house for sale, listed below Zillow's estimated value but above what all of the local realtors gave me as comps.  We shall see.

Huh?

They are using an automated valuation model of some kind.  Assessors have been using those for as long as statistical programs on main frame computers have been around.  Your taxable value on average is generally not too far off as long as the specific model is fairly detailed in the parameters used and the data for your property is in the system and is accurate.  Same for Zillow.

ysette9

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Re: Is Zillow High Right Now?
« Reply #26 on: June 10, 2019, 10:17:26 AM »
For fun, I looked up my house on Redfin and Zillow last weekend. We have been thinking that Zillow was low based on comps in our area and sure enough, Redfinís estimate was $250k higher than Zillow. Of course you donít know what the real value is until you actually sell, which we arenít planning on doing. It is sort of fun to play the guessing game though.

sol

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Re: Is Zillow High Right Now?
« Reply #27 on: June 10, 2019, 10:19:14 AM »
Huh?

I didn't mean zillow's algo is any different, just that everyone who buys a house overpays.  By definition, the winning bidder has valued the house more highly than everyone else has.  If ten people want to buy the house and nine of them bid $300k and one of them bids $600k, then the house is "worth" $600k because you were able to sell it for that much.

That's why real estate valuations are so hard; it doesn't really matter what 99% of people believe the property is worth.  All that matter is that one person who thinks it's worth more than everyone else, and in hot rising markets like mine that often means that every house sells for 10% or more over listing price, becausue listing prices was based on comps from six months ago.  One rich Amazon VP really falls in love with your bay window or something, and she just crushes all of the other bidders.  I think zillow is seeing that trend and projecting that you too will realize that kind of profit, even if your house doesn't have that crazy bay window or other random feature that causes some homes to sell for such ridiculous prices.

But in another week or two, I should be able to report back to this thread with a single data point about trying to sell a PNW house for something near the zillow estimated value.  I don't expect to get quite as much as zillow thinks it's worth, but I'm hoping for something within about 5%.

Zillow is also notorious for ignoring things that realtors tell you are obvious dings against a particular property's eventual sale price, like no garage, or a roof that needs repair, or badly cracked sidewalks.  Zillow just can't see that stuff with their aggregated data approach, but anybody who visits a house they want to buy will mentally subtract off some amount of money from a value closer to what zillow suggests to compensate for those kinds of shortcomings.  So I think the key to hitting zillow's lofty valuations is to fix as much of that as possible before sale, if you think it's profitable to do so. 

JLee

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Re: Is Zillow High Right Now?
« Reply #28 on: June 10, 2019, 10:19:45 AM »
Zillow should always value your home more highly than you do.  They are estimating an auction's winning bid, which means by definition the highest price anyone will pay.  Not what most people would pay.  Not what you would pay.

I'm currently testing this theory with a house for sale, listed below Zillow's estimated value but above what all of the local realtors gave me as comps.  We shall see.

My house sold for ~$7k above Zillow's estimate.

MrUpwardlyMobile

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Re: Is Zillow High Right Now?
« Reply #29 on: June 10, 2019, 11:03:59 AM »
Zillow is not a source for estimating your net worth.  The value of your home is what you paid for it until you sell it, then itís the value you sold it for.

Is the value of your investments what you pay for them until you sell them?

You should either track all of your assets at cost, or you should track all of them at market value.

Youíre confusing the rules for liquid and illiquid assets...

Another Reader

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Re: Is Zillow High Right Now?
« Reply #30 on: June 10, 2019, 11:11:28 AM »
Huh?

I didn't mean zillow's algo is any different, just that everyone who buys a house overpays.  By definition, the winning bidder has valued the house more highly than everyone else has.  If ten people want to buy the house and nine of them bid $300k and one of them bids $600k, then the house is "worth" $600k because you were able to sell it for that much.

That's why real estate valuations are so hard; it doesn't really matter what 99% of people believe the property is worth.  All that matter is that one person who thinks it's worth more than everyone else, and in hot rising markets like mine that often means that every house sells for 10% or more over listing price, becausue listing prices was based on comps from six months ago.  One rich Amazon VP really falls in love with your bay window or something, and she just crushes all of the other bidders.  I think zillow is seeing that trend and projecting that you too will realize that kind of profit, even if your house doesn't have that crazy bay window or other random feature that causes some homes to sell for such ridiculous prices.

But in another week or two, I should be able to report back to this thread with a single data point about trying to sell a PNW house for something near the zillow estimated value.  I don't expect to get quite as much as zillow thinks it's worth, but I'm hoping for something within about 5%.

Zillow is also notorious for ignoring things that realtors tell you are obvious dings against a particular property's eventual sale price, like no garage, or a roof that needs repair, or badly cracked sidewalks.  Zillow just can't see that stuff with their aggregated data approach, but anybody who visits a house they want to buy will mentally subtract off some amount of money from a value closer to what zillow suggests to compensate for those kinds of shortcomings.  So I think the key to hitting zillow's lofty valuations is to fix as much of that as possible before sale, if you think it's profitable to do so.

Market value is defined as the highest price in terms of money in an exchange between a willing buyer and a willing seller for most legal purposes.

v8rx7guy

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Re: Is Zillow High Right Now?
« Reply #31 on: June 10, 2019, 11:19:35 AM »
Zillow is not a source for estimating your net worth.  The value of your home is what you paid for it until you sell it, then itís the value you sold it for.

Is the value of your investments what you pay for them until you sell them?

You should either track all of your assets at cost, or you should track all of them at market value.

Youíre confusing the rules for liquid and illiquid assets...

You're confusing net worth for something different...

sol

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Re: Is Zillow High Right Now?
« Reply #32 on: June 10, 2019, 11:21:28 AM »
Market value is defined as the highest price in terms of money in an exchange between a willing buyer and a willing seller for most legal purposes.

Sure.  And so in most situations, what you think it's worth is not the market value.  Houses are not sold like candy bars, they are sold at auction to the highest bidder and you're probably not going to be the highest bidder.

Hence threads like this one, where virtually everyone thinks their house is worth less than market value.

DadJokes

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Re: Is Zillow High Right Now?
« Reply #33 on: June 10, 2019, 11:31:52 AM »
Zillow is not a source for estimating your net worth.  The value of your home is what you paid for it until you sell it, then itís the value you sold it for.

Is the value of your investments what you pay for them until you sell them?

You should either track all of your assets at cost, or you should track all of them at market value.

Youíre confusing the rules for liquid and illiquid assets...

I'm not confusing the two. Using market value provides a more realistic picture of a balance sheet. In reviewing the solvency of a business, the fair value of assets (liquid and illiquid) provides a better idea of the financial position of a company than the historical cost. It has taken the FASB 40 years to come around to this, but they are finally coming around to allowing fixed assets to be reported at market value.

The same is true for an individual household. What if you have to sell your house to cover unexpected debt? Your historical cost doesn't matter. What you can sell your house for today does.
« Last Edit: June 10, 2019, 01:44:10 PM by DadJokes »

MrUpwardlyMobile

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Re: Is Zillow High Right Now?
« Reply #34 on: June 10, 2019, 08:14:46 PM »
Zillow is not a source for estimating your net worth.  The value of your home is what you paid for it until you sell it, then itís the value you sold it for.

Is the value of your investments what you pay for them until you sell them?

You should either track all of your assets at cost, or you should track all of them at market value.

Youíre confusing the rules for liquid and illiquid assets...

You're confusing net worth for something different...

Nope.

MrUpwardlyMobile

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Re: Is Zillow High Right Now?
« Reply #35 on: June 10, 2019, 08:16:31 PM »
Zillow is not a source for estimating your net worth.  The value of your home is what you paid for it until you sell it, then itís the value you sold it for.

Is the value of your investments what you pay for them until you sell them?

You should either track all of your assets at cost, or you should track all of them at market value.

Youíre confusing the rules for liquid and illiquid assets...

I'm not confusing the two. Using market value provides a more realistic picture of a balance sheet. In reviewing the solvency of a business, the fair value of assets (liquid and illiquid) provides a better idea of the financial position of a company than the historical cost. It has taken the FASB 40 years to come around to this, but they are finally coming around to allowing fixed assets to be reported at market value.

The same is true for an individual household. What if you have to sell your house to cover unexpected debt? Your historical cost doesn't matter. What you can sell your house for today does.

You donít know market value of an illiquid asset like a specific house unless and until you sell it on the market.

Another Reader

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Re: Is Zillow High Right Now?
« Reply #36 on: June 10, 2019, 08:40:12 PM »
Zillow is not a source for estimating your net worth.  The value of your home is what you paid for it until you sell it, then itís the value you sold it for.

Is the value of your investments what you pay for them until you sell them?

You should either track all of your assets at cost, or you should track all of them at market value.

Youíre confusing the rules for liquid and illiquid assets...

I'm not confusing the two. Using market value provides a more realistic picture of a balance sheet. In reviewing the solvency of a business, the fair value of assets (liquid and illiquid) provides a better idea of the financial position of a company than the historical cost. It has taken the FASB 40 years to come around to this, but they are finally coming around to allowing fixed assets to be reported at market value.

The same is true for an individual household. What if you have to sell your house to cover unexpected debt? Your historical cost doesn't matter. What you can sell your house for today does.

You donít know market value of an illiquid asset like a specific house unless and until you sell it on the market.

You most certainly do.  Why would a bank loan you money on a house if they did not have a pretty good idea of what the value is?  You may not be able to determine value to the penny, but comparable sales, adjusted for differences between the sold properties and your property with market derived adjustments will give you a fairly narrow range of value.  It might be more difficult with unique, rarely sold properties, but a knowledgeable appraiser should be able to determine a reasonable range.

jinga nation

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Re: Is Zillow High Right Now?
« Reply #37 on: June 11, 2019, 06:23:09 AM »
As a previous poster mentioned, it's about comps. And location.

For my home and investment properties, Zillow is right on the mark, give or take 5k. Plenty of comps, investors from 2011-2012 are selling out since prices have more than doubled. Steady home sales in my area, barely any flips, have increased my home price inline with the market.

The estimates on realtor.com are similar too.

Dicey

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Re: Is Zillow High Right Now?
« Reply #38 on: June 11, 2019, 04:25:18 PM »
As a previous poster mentioned, it's about comps. And location.

For my home and investment properties, Zillow is right on the mark, give or take 5k. Plenty of comps, investors from 2011-2012 are selling out since prices have more than doubled. Steady home sales in my area, barely any flips, have increased my home price inline with the market.

The estimates on realtor.com are similar too.
For my stupid custom clown house in NorCal, Zillow is too low, because they can't see inside. It's also a newer home in a more established neighborhood of typically smaller homes.

For our rentals in SoCal, they're consistently too high. If I actually wanted to move one of them quickly, I'd have to ask a fair amount less. But as ysette9 notes, it's fun to watch.

talltexan

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Re: Is Zillow High Right Now?
« Reply #39 on: June 12, 2019, 09:04:47 AM »
I have long-suspected that Zillow is overvaluing my house. The fact that they're used so extensively for home values and now own real estate seems...like I ought to own some shares of the company.

MrUpwardlyMobile

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Re: Is Zillow High Right Now?
« Reply #40 on: June 13, 2019, 08:10:45 AM »
Zillow is not a source for estimating your net worth.  The value of your home is what you paid for it until you sell it, then itís the value you sold it for.

In my opinion Zillow is a fine place to get an estimate for a net worth calculation.

Zillow estimates for almost identical apartments in the same complex.

https://www.zillow.com/homedetails/372-Central-Park-Ave-3J-Scarsdale-NY-10583/2096822644_zpid/
$628,268

https://www.zillow.com/homedetails/372-Central-Park-Ave-APT-1D-Scarsdale-NY-10583/2138340928_zpid/
$628,481

How much do those apartments actually sell for?

About $155-$165k

Zillow is not a good source for estimating home value to use for net worth.



Another Reader

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Re: Is Zillow High Right Now?
« Reply #41 on: June 13, 2019, 10:03:56 AM »
Zillow is not a source for estimating your net worth.  The value of your home is what you paid for it until you sell it, then itís the value you sold it for.

In my opinion Zillow is a fine place to get an estimate for a net worth calculation.

Zillow estimates for almost identical apartments in the same complex.

Those are coops, not condos.  Zillow fails to distinguish them.

https://www.zillow.com/homedetails/372-Central-Park-Ave-3J-Scarsdale-NY-10583/2096822644_zpid/
$628,268

https://www.zillow.com/homedetails/372-Central-Park-Ave-APT-1D-Scarsdale-NY-10583/2138340928_zpid/
$628,481

How much do those apartments actually sell for?

About $155-$165k

Zillow is not a good source for estimating home value to use for net worth.

sol

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Re: Is Zillow High Right Now?
« Reply #42 on: June 13, 2019, 10:12:04 AM »
Counterpoint, and a follow up from my earlier post in this thread:  the property I listed for sale about halfway between the realtor's estimate and the zillow estimate got a full price offer.  As expected, it's <5% below zillow's estimate and <5% above the realtor's estimate.

As has been previously pointed out, zillow's accuracy depends on the availability of good recent comps, and that's not unique to zillow's algorithm.  It's always hard to estimate the value of something that hardly ever sells.  At least in my area, with lots of comparable homes selling pretty much continuously, zillow seems pretty accurate.

v8rx7guy

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Re: Is Zillow High Right Now?
« Reply #43 on: June 13, 2019, 10:27:40 AM »
Zillow is not a source for estimating your net worth.  The value of your home is what you paid for it until you sell it, then itís the value you sold it for.

In my opinion Zillow is a fine place to get an estimate for a net worth calculation.

Zillow estimates for almost identical apartments in the same complex.

https://www.zillow.com/homedetails/372-Central-Park-Ave-3J-Scarsdale-NY-10583/2096822644_zpid/
$628,268

https://www.zillow.com/homedetails/372-Central-Park-Ave-APT-1D-Scarsdale-NY-10583/2138340928_zpid/
$628,481

How much do those apartments actually sell for?

About $155-$165k

Zillow is not a good source for estimating home value to use for net worth.

My point is that it's good enough.  Net worth is an arbitrary number that is based on a lot of speculations as to what your crap is worth.  Net worth is not the same as your "stache", which yes, should be accurate to determine if/when you can retire.  Of course your can find examples of errors & flukes in the system, but by and large Zillow is fine for estimating your net worth.

Telecaster

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Re: Is Zillow High Right Now?
« Reply #44 on: June 13, 2019, 11:09:35 AM »

You donít know market value of an illiquid asset like a specific house unless and until you sell it on the market.

That's true, but you can be assured that the value of your house isn't the amount you paid for it (except in very rare circumstances).   It is generally not helpful to use a value known to be incorrect.   

theoverlook

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Re: Is Zillow High Right Now?
« Reply #45 on: June 13, 2019, 12:08:35 PM »

You donít know market value of an illiquid asset like a specific house unless and until you sell it on the market.

You can know its value way more accurately than basing it on its purchase price. House prices vary over time, both up and down, so you don't know it's worth the original purchase price any more than you know it's worth the Zestimate.

You can get an appraisal, you can do a market analysis, you can look at the zestimate, you can use the county valuation for your property, etc etc. Any of those are just as valid if not more so than using the price you paid.

Michael in ABQ

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Re: Is Zillow High Right Now?
« Reply #46 on: June 13, 2019, 02:00:38 PM »
Off the cuff theory: If homes that are being sold are more likely to have been remodeled/updated than homes that are not on the market, you get a situation where homes being sold are going for mucho dollars because they all look nice inside... whereas homes that are not nice inside are being valued by Zillow as if they are.

That could explain why Zillow is always too high.

Yes, this is probably a factor. If you have an older neighbor who has lived in their house for a few decades without remodeling vs. a house that has been bought and sold and renovated a few times, which do you think will be worth more?

This is common when someone dies and their kids/grandkids find out the house needs a bunch of work and isn't worth nearly what they thought it would be. I've heard the same story from multiple coworkers when their parents died and they were left trying to sell their outdated house.

Dicey

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Re: Is Zillow High Right Now?
« Reply #47 on: June 16, 2019, 09:24:36 AM »

You donít know market value of an illiquid asset like a specific house unless and until you sell it on the market.

You can know its value way more accurately than basing it on its purchase price. House prices vary over time, both up and down, so you don't know it's worth the original purchase price any more than you know it's worth the Zestimate.

You can get an appraisal, you can do a market analysis, you can look at the zestimate, you can use the county valuation for your property, etc etc. Any of those are just as valid if not more so than using the price you paid.
Bottom line: a house is worth exactly what someone is willing to pay for it. An appraisal from a crackerjack appraiser doesn't guarantee you'll get that price. For net worth purposes, a good guess is fine. Search Zillow, Realtor, Redfin, etc. Add the values together and divide by the number of sources to get an average and boom, you're done..