Why is my Zillow estimate rising so quickly?

[High_Plains_Retired]

Zillow's estimates may be more accurate in some places than in others but Homes-dot-com has our urban home in central New Mexico valued a little over 10% more than Zillow. Realtor-dot-com has it at a lower value than Zillow.

These figures are all interesting but no seller in their right mind would price their home on the market without valid recent comps, or an appraisal.

[MikeJaquish]

Originally Posted by High_Plains_Retired

Zillow's estimates may be more accurate in some places than in others but Homes-dot-com has our urban home in central New Mexico valued a little over 10% more than Zillow. Realtor-dot-com has it at a lower value than Zillow.

These figures are all interesting but no seller in their right mind would price their home on the market without valid recent comps, or an appraisal.

Many are using the online appraisals as their basis for pricing, and need some dissuasion from that approach.
It's an old story. Once a number is in someone's head, can be almost impossible to erase it.

It's why salespeople want to talk about wants, needs, and their value proposition thoroughly in their pitch before offering their price.
Build all the value possible so the price looks great. Once the number is out, it is very difficult to build value.

[albert648]

I cross-reference Redfin, Zillow and Realtor.com to get a ballpark idea of what my house is worth and figure in about a +/-10% margin of error for wear and tear/improvements. In my area, Redfin's always the lowest, Zillow the highest and Realtor.com somewhere in between.

No intention of selling, just like to track the market in case the county decides to reassess my property taxes (rarely in my favor) and/or want to refinance my loan.

[BoBromhal]

Originally Posted by adjusterjack

Not when nearby sales support them.

They certainly aren't meaningless in my area.



I know. But that's like comparing apples to elephants. People in CA are selling million dollar homes and buying similar style and quality for half that in AZ.

In 2019 $238,000 was the price of a modest, average, middle class home (I don't waste my money on pizazz) and nearby sales supported that price. Even then one could buy homes for $500,000 to a million in certain areas of Phoenix.



I used to think the same but if nearby sales of comparable houses support the zestimates, there must be some validity to them.

in a large subdivision/planned community with homogenous homes, the Zestimate can be accurate. It should be accurate - there were maybe 8 total house plans plus 4 elevations, and they're all within 20% of each other square footage, beds/baths, etc. There's usually a relevant amount of data (number of homes sold similar to the subject).

[BoBromhal]

However, let me use my home as an example of where they can't be considered accurate. You tell me if their comps are "good".

Mine is an infill house (1984) among mid-50's to early 60's homes.

I check the Zestimate, and click the comparable sales.

One is from 2018. It's in a more desirable - $$ - middle school district, about 3 miles from my house

One (up the block) actually sold in 2013, and then they expanded it. I have no idea where they are getting the sales price, because it surely didn't sell for $1.2MM, and it's 2020 tax value was $717K.

One is 2019, and is a ranch plus basement; mine is a 2-story w all BR's upstairs.

One is a private sale from last month, but it's about 5 miles from my house.

[Hemlock140]

Originally Posted by Berteau

They aren’t meaningless. I’ve found them to be close to selling prices.

Here they are actually low. Advertised prices tend to be in the ballpark with Zillow, but then with multiple offers over asking they go for $50-100k over that. Ours is now up to 1.2 million on Zillow and the rest, that is up almost double from $688,000 in 2017. Many buyers, few homes for sale.

[blue777]

It's now at $245,000

[adjusterjack]

Originally Posted by adjusterjack

Demand is being fueled by low inventory and low interest rates.

I'm seeing the same thing in Phoenix. I bought my house for $238,000 in June 2019. Current Zestimate is $362,200, up $37,590 (+11.6%) in just the last month. And, guess what, 5 comparable houses in my subdivision sold since April between $350,000 and $400,000. It's not just imaginary.

Update:

Zillow 388,200
Redfin 361,111
Homes.com 343,750
Realtor.com 362,600

Another sale in my subdivision on July 29, a 3/2 1402sf, tenant occupied. $372,000.
6460sf lot size. Same size house and same 1980s interior as mine. Lot size 6460sf. My lot size is 12470sf with a 1200sf 3 car garage in the back.

I think Zillow has included the additional garage space in the Zestimate because the specs show 5 parking spaces where Redfin only shows 2.

Anyway, this is an academic exercise for my amusement. I'm in for the long haul.

[Mr. Zero]

We have one property where the Redfin estimate and the Zillow estimate are off by more than a million dollars from each other. We recently had it appraised for a refinance, and both appraisals came in between the online estimates, with one appraisal closer to the lower Zillow estimate, and one closer to the higher Redfin estimate.

Of course, even the lowest estimate (Zillow) was more than half a million higher than what we paid for the property last year, and the lowest appraisal was about $1MM more than we paid. Gotta love California real estate.

[DannyHobkins]

Just keep in mind after this year is done we will probably see real inflation around 5-10%, so factor that into the house. Your house is not only worth more because of demand but a lot has to do with inflation.