Zillow CEO Spencer Rascoff Doesn't Believe the Zestimate!
Reported on inman.com: on Feb 29, 2016 Zillow CEO Spencer Rascoff sold his home in Seattle for $1.05M. When viewed on Zillow the next day the Zestimate gave it a value of$1.75M. As of today, May 26, 2016 the Zestimate has dropped to $1,568,109.
In 5 minutes you can do a better estimate than given by the Zestimate for the home of Zillow CEO Rascoff. Visit my home values page http://julianalee.com/real-estate-statistics.htm and follow the links to your city, neighborhood, or zip code and use the price per sq.ft. to estimate your home’s value.
Why Is The Zestimate So Inaccurate?
Most third party websites which provide home values use the county assessor's reported ownership transfer data. Many of the homes in the transfer data have not been publicly listed for sale. The property has been transferred to a limited liability corporation (LLC), has been transferred to a relative, or a similar "sale" which is not an open market sale. Additionally the third party websites assume that homes nearby are very similar. In Silicon Valley there are very few new single family home tract developments. Most of the tract homes are 40+ years old and each house has had numerous changes made to it.
How Accurate Is The Zestimate?
Zillow publishes data on how accurate their Zestimate is. A link to this data is http://www.zillow.com/howto/DataCoverageZestimateAccuracyCA.htm
In September of 2016 the reported accuracy for San Mateo and Santa Clara counties is:
|County||within 5%||within 10%||within 20%||Median Error|
If you were to pay 5% more than you had to, you would be extremely upset with your real estate agent. If you offer 5% too low, you may not even get a chance to make a second offer. Do not use Zillow's Zestimate as the exact amount to offer, if you are buying, nor the value to expect, if you are selling. Use the advice of an experienced real estate agent who is talking with buyers, sellers, and other real estate agents every day. Zillow is only accurate enough somewhere between 1/4 and 1/2 of the time. (In rural areas it is worse.)
Zillow can give you an easy way to compare city or neighborhood home values but an even better way is to visit my Silicon Valley home values web page and find the sales price per square foot for the neighborhood you are interested in. The values are based on open market home sales. Also, pay attention to the size and age of the homes to judge if it is a typical home for that neighborhood. The information you need can be reached from my Silicon Valley home values web page.