Zillow Zestimates®.. How do they compare with Berkeley Real Estate Real Estate Realty Reality?
We're seeing more homeowners accepting Zillow Zestimates® as their home's market value.
The San Francisco Chronicle just published an article by Carolyn Said "Home values hold in few places in Bay Area".. and it got me thinking.
I was curious.. how do the Zestimates® actually compare with Berkeley Real Estate Realty Reality?
So my "inner engineer" got the better of me. Yep.. I've two Chemical Engineering Degrees (1970 B.S.Ch.E. Cooper Union, 1974 M.S.Ch.E University of Massachusetts, Amherst)... so I do things like this for fun.
Carol and I spent several hours researching the Zillow Zestimates® of 3 bedroom homes which sold in Berkeley Jan-Jun 2008.. and compared the Zestimate® to the actual sales prices.
This scatter graph shows the Zestimate® on the vertical axis, and actual sales price on the horizontal axis. Data points on the 45º line are where the prices match. Data above the 45º line indicate homes where the Zestimate® was more that the actual sales price; data below the 45º line gives a Zestimate® below the actual sales price.
In 67% of the time, the Zestimate® was higher than the actual sales price.
The Zestimate® looks like it was much closer in the $400,000 to $750,000 price range.
And where was the Zestimate® most likely to be much too high... Or low? In the $800,000 to $1,200,000 price range., there are several examples where the prices were off by $100-200,000.
I've come up with a new verb.... "Zillowed"
That's what happens to a real estate agent when a seller decides their home at the Zestimate® price, and not its current market value.
And since the Zestimate® is higher than the home's value, the home doesn't sell.
We've been Zillowed once this year... so I figured it was time to see how Zillow Prices compare to reality.
What does this all mean? When selling, you really need a local expert on your side.
And the same thing goes for buying.
It's just as common for seller to sell for much less, and buyers to pay too much, when relying on Zillow to determine value.
There's no substitute for "boots on the ground"... and that's why it's so important to have a neighborhood expert on your side.
Sales Prices: East Bay Regional MLS
Zillow Zestimate®: zillow.com
Email firstname.lastname@example.org or call 510-526-6668 for more information.
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