zestimate way up!

[solon]

The zillow estimate on my house just shot up 4.5%. Did anyone else notice this recently?  I haven't made any major improvements, so I'm thinking it must be due to the general economy, or something.

[unseenstache]

Mine has been going up dramatically the past 2 months.   Not sure how much I belIeve it.

[solon]

Oh yeah, I agree their estimates aren't very accurate. But I think we can still discern trends. Up is a good trend!

[frugalnacho]

My zestimate is 67% higher than when I purchased the house in 2009, and is at least 20% above what comparable houses are actually selling for in my area.   The zestimate feature is useless in michigan and seems to have no connection to the actual market.

[hoodedfalcon]

Yeah, I am afraid the zestimate is having an unrealistic impact on my net worth in Mint....

[Tetsuya Hondo]

Zillow says my house is worth more now too. But, the chicken bones say it's worth less. So, I guess it's a wash.

[LifesABeach]

Out of curiosity, I checked my townhouse.  In my complex there are 15 units that are nearly identical, except for maybe different colors of walls and floors. Zillow has estimates all over the place for these. There was one that the zestimate was $33k higher than mine, and there were photos that I could compare to see if they had made any improvements. The place is nearly identical to mine.  The only difference I noticed was a different light fixture.

Nonetheless, even the lowest priced one is $49k more than I paid 2 yrs ago, so that's encouraging, even if it is totally unreliable.

[slugline]

"Zestimates" aren't actually connected to what's happening in the real world. I guess they're better than nothing, but not as good as a having stack of recent comparable sales in the neighborhood.

[DecD]

Zillow suggests my house has jumped by over 25% in the past two years.  I am skeptical, to say the least.

[ArbitraryGuy]

Up is a good trend!

Not if you're looking to buy...

[plantingourpennies]

We get an astounding number of hits on our blog from people searching for the term "zillow sucks" in google.

You can get a good idea of what your home is wort by using comps; zillow doesn't cut it.

Best,
Mr. PoP

[Jack]

My house's Zestimate is up more than 120% from the 2009 purchase price. I think it's 30-40% higher than what I could actually get for it (although I haven't checked real comps lately).

[dragoncar]

"Zestimates" aren't actually connected to what's happening in the real world. I guess they're better than nothing, but not as good as a having stack of recent comparable sales in the neighborhood.

Ironically, OP's Zestimate probably shot up because an expensive house was just sold nearby.  A very real-world event.  Not that it means his home value also increased (maybe the recent sale is 2x the size).

[Dicey]

I live in NorCal. In a hot real estate market, Zillow is not all that accurate. Your market may vary, but here is a personal example. In March 2013, I listed my townhouse for 539k. I received multiple offers for 600k within the first week*. It closed in April, 2013. Since then at least seven people in the HOA have leveraged that price and have closed for even higher prices.

Zillow has consistently listed my old home's value at closer to my asking price than my closing price, despite newer sales for even higher prices per square foot. Finally, after almost eighteen months, Zillow is just now valuing it at 603k. Based on recent comps, it would probably fetch somewhere around $660-$675 in today's market.

Conversely, Zillow claims the home we closed on in August, 2013 is now worth 172k more than we paid for it. In this case, probably way too high.

So, Zillow is a good source for past history, current listings, and armchair shopping. It is not a reliable indicator of your home's worth. If you are seriously looking, seek out an experienced realtor. They know the local market much better than Zillow.

*Yes, I had multiple offers. I chose the young family who included a lovely cover letter and a letter of prequalification with their offer. If you're ever in a bidding situation, write a cover letter with your offer. It works.

[db_cooper]

zillow is about as accurate as the local assessor.  the assessor has been 200k over what we can sell for, and zillow 100k under.   first world problem for sure.

[Workinghard]

I dunno. We recently got comps from 3 different  realtors and zillow fell right in the middle.

[zinnie]

Yeah, don't get too excited about Zillow. My house value has been both pretty close to accurate and very VERY far off in short periods of time. In the past year Zillow told me my house went from under 500 to a high of 750k a few weeks ago. Now it says 498 again (which is probably about accurate).

It's fun to see on Mint when it is high, but it can really screw your calculations.

[Dicey]

I'd bet that Zillow is more accurate in less active markets. In a hot market with limited inventory, prices are less predictable.

Right now the house around the corner from me is on the market for $783/sf. It's 65 years old, 2+1 with no garage, gravel road/drive and not particularly up to date, to say the least. My house is 7 years old, 4+3.5, 3 car 1050 sf garage, paved street with sidewalks, twice as big a lot, and high end finishes throughout. Even if I use the too-high Zestimate, my house works out to $417/sf.

The house around the corner is likely to sell at or near the asking price. Why? Because at the moment, it's the cheapest single-family home on the market in my city. Gads! So, if the housing stock is highly varied and inventory is tight, providing accurate Zestimates is darn near impossible.

[nordlead]

Zillow says my house value has plunged by over 27% in the last 3 months...

When I bought the house Zillow said it was worth a few thousand less than what I paid, which seemed reasonable since my market is very stable and after the housing crash I would expect our prices to drop slightly. But the last 3 months are completely unrealistic, as my house is now worth less than the smaller split level next door (and I think split levels are horrid). If I could by the house across the street for Zillow's price of $100k I would in a heartbeat, since it is the exact same house I have with a slightly bigger yard. According to Zillow I can sell my house, buy his, and turn a modest profit...

I used Zillow to make Mint track my total net worth, but at this point it is completely off and mostly useless. Oh well.

[brewer12345]

The equity in my home is largely irrelevant to my FI picture.  I cannot easily spend it, rebalance, etc. and if I sell the house I either have to buy another one or rent.  So while I pay some attention to home equity $$$, mostly I don't much care.

[Dicey]

The equity in my home is largely irrelevant to my FI picture.  I cannot easily spend it, rebalance, etc. and if I sell the house I either have to buy another one or rent.  So while I pay some attention to home equity $$$, mostly I don't much care.

Well said, brewer12345! I think I used way more words trying to make a similar point. Brilliant!

[ingrownstudentloans]

Mine rose from $208,000 to $265,000 in the past 4 months - normally I would ignore it, but thanks to my student loans, mint shows me as having a positive net worth for the first time ever, so I will pretend it reflects reality.

as an FYI - I did just get the house appraised for a potential refinance, the appraisal came in at $220,000 2 weeks ago...

[Gone Fishing]

Get ready for your taxes to go up! As I don't plan on moving, appreciation of my primary residence is a bad thing...

[zinnie]

The equity in my home is largely irrelevant to my FI picture.  I cannot easily spend it, rebalance, etc. and if I sell the house I either have to buy another one or rent.  So while I pay some attention to home equity $$$, mostly I don't much care.

This makes sense if you are planning to FI in a place with similar housing costs as the one you are currently in, but for those who aren't home equity can make a big difference. If my property value goes up any higher than it currently is, I can reach FI much sooner since I wouldn't need all of the equity in my house for the next place I live.

[ingrownstudentloans]

The equity in my home is largely irrelevant to my FI picture.  I cannot easily spend it, rebalance, etc. and if I sell the house I either have to buy another one or rent.  So while I pay some attention to home equity $$$, mostly I don't much care.

This makes sense if you are planning to FI in a place with similar housing costs as the one you are currently in, but for those who aren't home equity can make a big difference. If my property value goes up any higher than it currently is, I can reach FI much sooner since I wouldn't need all of the equity in my house for the next place I live.

True, or, as in my case, the current primary homes is a two family that I plan on keeping regardless of where I live next.

[MooseOutFront]

Just as an irrelevant slice of anecdotal evidence, my Zestimate is $179,000 ($30k less than a year ago), and the comp based valuation PenFed just put on it last week for my new HELOC was $199,000.  I'm pretty sure I could get it sold for $225,000.

[Tami1982]

I paid $67,000 for my house in 2012.  Zillow says it's worth $95,000.  It sold for $112,000 in 2005 (bubble!).  At this time, there is nothing else in the area available like my house so it's hard to pull comps.  Based on what info I have, I do think it would sell for at least $85,000.

[ketchup]

Zillow hilariously overvalues my rental house (small one-bedroom house).  I paid $18,500 in 2012, and it's probably worth $25k maybe today at the absolute most.  Zestimate is over 50 grand.

Take it with a grain of salt.  If you want to know actual market value of your house, research comps or ask a realtor.

[Davids]

I don't trust zillow, trulia or other sites that estimate home value. Zillow has my house at $235K but Trulia has it at $265K, homes.com has it at $255K...

[Emilyngh]

6 mos ago Zillow had our house as worth as high as $240k (we bought it 3 years earlier for $192k).   Right around then we had it appraised for a refi at $199k.   Zillow is currently saying it's worth $172k.   No way have house prices swung this much in our area.   Seems to me, at least where I am, Zillow's pretty worthless.

[MrFrugalChicago]

I think zestimate is pretty bad.

Mine zestimate has sat at 320k for almost a year (+ or - 5k)

Listed house for 420k.. one week later, my zestimate is 415k

How useful...

[Grateful Stache]

It's only worth what someone is willing to pay.

[DarinC]

Zestimate is weird... Look at the median sales price per square foot for comparable homes if you can get it (usually via MLS), or ask a Realtor.

Also include days of supply in your area since that indicates how long it takes homes to sell. The delta for those can be very helpful too.

[Distshore]

I have no idea why, but my zestimate is ~ $100K higher than I think our house is worth (~15% error IMHO).  Next door's house (very similar to ours) lists ~$90K lower, and the other neighbour's (one whole storey higher, fully renovated) at ~$20K lower than ours. 

While I'm not quite stupid enough to believe it, it screws up my net worth numbers in Mint and makes me think sometimes that FI is closer than it really is!  I can't see that their numbers are based on decent comp sales at all.

[ambimammular]

When I checked our home on Zillow it had our address listed as one story instead of two, and 800 sq ft short. After updating the site put our home at exactly the same price. I'd like to hear their explanation for that!

I suppose it's a moot point as we'll live here 20 yrs or more.

[TomTX]

Hahaha - Zillow doesn't even recognize my house exists. Which is odd, as all the houses next to it and across the street exist.... and it's right there in the overhead photo...

[Dicey]

When I checked our home on Zillow it had our address listed as one story instead of two, and 800 sq ft short. After updating the site put our home at exactly the same price. I'd like to hear their explanation for that!

I suppose it's a moot point as we'll live here 20 yrs or more.

Not  a moot point at all! This happened to my parents. When I tried to "fix" it, I was told Zillow gets their numbers from the local tax assessor. I decided to just zip my lip and keep moving. Don't need any reassessment, no siree!

Hahaha - Zillow doesn't even recognize my house exists. Which is odd, as all the houses next to it and across the street exist.... and it's right there in the overhead photo...

Yeah, our photo shows the neighbor's property in the center and ours down at the very bottom, while it was still under construction. Seven, almost eight years ago now.

[horsepoor]

Meh.  Zillow had our house almost to the $300K mark earlier this year, then it plummeted back to $240, and has popped back up again recently to $246, per Mint.  Looking at comparable houses for sale, I'd say mid $200's is about right.

Our old house just went under contract for within $3K of the Zestimate, which was climbing this spring, then leveled out over the summer.  The housing market here is active, but definitely not "hot."

[Sdsailing]

My zestimate went up 35% over 2 months and then went right back down to the original price.  Actual value is in fact up at least 35%. No rational reason why it went back down.

[innerscorecard]

You know, it's funny, Zillow is making housing more like the stock market with these daily fluctuations in value. Where previously, the very reason that buying houses made sense for most people over stocks despite the lower expected return is that people wouldn't see market fluctuations so often, making them less likely to buy or sell out of panic.