Steve - I've been poking around Zillow and am struck by the fairly large difference between the Zestimate and the asking price. A lot of homes have a spread of $50K and one is about $125K, about an 18% of the asking price.
As a general rule, how do you feel about Zillow and the house price estimates? Are these difference caused by the increasing market activity, but Zillow just hasn't seen comps in the area of listed homes?
Hey Carl - sorry I missed your note earlier.
Let's let Zillow answer your questions:
http://www.zillow.co...ateAccuracy.htmThey give themselves 2 out of 4 stars for accuracy in the Sacramento area. They say that about 25% of their 'zestimates' are within 5% of the sales price. So, that means on a $400,000, if they are within 5%, it could be worth $380K or it could be worth $420K. That's a spread of $40,000 right there.
Worse yet, they are within 20% accuracy on 75% of the homes. That's not a very good number in my opinion.
Zillow is not used by appraisers, lenders, underwriters, realtors, or insurance companies, but the public seems to love it.
It's really a stripped down version of an AVM (automated valuation model), which IS used by lenders. The AVM can take into account things like unemployment rate, foreclosure rates, number of homes in default and other factors which can affect current and future values.
What Zillow really does well is capture people's interest and information, then sell the info as leads to Realtors who advertise on their site.
To get a more accurate opinion of value, call a good Realtor who knows the market well, and/or hire and appraiser. The appraiser may cost you $400 or so, but relying on Zillow can cost you $40,000.
