I got an email from Zillow today informing me of a drop in my Zestimate. For those not familiar with a Zestimate, it is defined as:
Zillow’s estimated market value, computed using a proprietary formula. It is not an appraisal. It is a starting point in determining a home’s value. The Zestimate is pulled from data; your real estate agent or appraiser physically inspects the home and takes special features, location, and market conditions into account. Variations in price also occur because of negotiating factors, closing costs, and timing of closing.
Some people swear by Zestimates. Many others believe that their formula is getting better and better and Zestimates are getting close to real world value. In the case of my home though, they are wayyyyy off.
According to this, my house was worth around $190k in April of ‘08 and somehow shot up to $240k in December. I can see why these Zestimates are tempting to believe! If I were to put my house up today, I would be lucky to get $160k. Now, I haven’t done a full CMA on my property because I feel Pigtown is getting close to the tipping point. But I can see where Zillow is getting confused. Barre Circle is two blocks away & Ridgely’s Delight is just three. But two blocks can make all the difference in Baltimore.
It’s not just websites that give inflated estimates though. There are a lot of agents out there who tell sellers whatever they want to hear to get the listing. This was the topic of the Real Estate Wonk yesterday, give it a read if you have a minute. In the meantime, take Zestimates for what they’re worth. And before listing with an agent, dig a little deeper into their track record of average time on market, close price vs original list price, etc.
