Posted on 12/18/2024 9:03:32 AM PST by Angelino97
The Zestimate is arguably the most popular — and polarizing — number in real estate. An entire generation of homeowners doesn't know life without the algorithm; some obsessively track its output as they would a stock portfolio or the price of bitcoin...
Many industry insiders regard the number as a starting point at best and dangerously misguided at worst. Real-estate agents recount arguments with sellers who reject their pricing advice, choosing to take the Zestimate as the word of God. One meme likens its disciples to adults who still believe in Santa.
Zillow itself lost hundreds of millions of dollars during the pandemic when it relied on its algorithm to buy homes at inflated prices, part of an ill-fated attempt to flip homes at scale.
The Zestimate is one of a slew of automated valuation models that are increasingly used by banks, investors, and laypeople to estimate the value of homes. No other model, however, has wormed its way into our culture like the Zestimate. The model is prone to errors that render it more of an amusement than a serious pricing tool...
The Zestimate is both everywhere and an enigma. About 104 million homes, or 71% of the US housing stock, have a dollar figure hovering above them on Zillow's website...
Just how accurate are those numbers? Until the house trades hands, it's impossible to say. Zillow's own explanation of the methodology can be misleading. The model, the company says, is based on thousands of data points from public sources like county records, tax documents, and multiple listing services — local databases used by real-estate agents where most homes are advertised for sale.
Zillow's formula also incorporates user-submitted info: If you get a fancy new kitchen, your Zestimate might see a nice bump if you let the company know...
(Excerpt) Read more at msn.com ...
Like EPA Gas Mileage numbers are written in stone...............
Just because you have a number to 4 digits, doesnt mean it is a real number.
Lots of numbers throughout society that people believe.
Realtors get mad and love to list with a lower price. Speed of transaction is FAR more important to them than another 20k on the price. They may only get another 400, 500 on a higher price. But the additional 20k for the seller can mean much more.
As always, depends where and when.
But according to the Freakonmics book, when Realtors list their OWN house, they price higher and take several more weeks or months to get a higher price accepted.
I added an addition on my home in 1997. It put about 400 sq feet to my living space. The town knows about it. I certainly get taxed on it.
But Zillow still lists the home without it. I chuckle when i look it up every couple of months.
When I finally sell the house, it is going to screw up their algorithm.
And at least a Zestimate gives a homeowner a starting place. In the past you were largely at the mercy of what the broker’s estimates were.
My Zillow house value goes up or down by 20K some months in their estimate all the time. Some months my house is worth more than my neighbors and other months the neighbors are worth more. Very unreliable estimates.
If zillow tells ya a property is worth 500k, make it 450k or less.
“If zillow tells ya a property is worth 500k, make it 450k or less.”
That is a really stupid comment ...
That’s right. Realtor want their commissions now. Lower your damn prices people because the RE agents are tired of waiting for their bloated inflated outrageous commissions.
Shutup TexasTrumpHater
My home’s Zillow estimate has varied by $100k in the last 6 months.
I suspect the county is using Zillow’s estimate to raise the property taxes on my house.
It’s not a huge mystery how these algorithms work... they’re basically just using price-per-sq-ft sales data for your location and multiplying it by the size of the property and perhaps tweaking it a bit based on number of bathrooms, amenities like swimming pool etc,
It’s a starting point but some of their numbers are crazy high and some are crazy low. The crazy high number is often for the crappy house in the nice neighborhood. Zillow/Redfin etc have no predictive mechanism for how well the current owners have maintained/remodeled/improved/damaged the place, and they assume that the dumpiest house on the block as just as good as all the rest. The crazy low number is typically seen for the improved placed that, due to remodeling, upgrades etc, is actually way better than the information available in public records would suggest
“Shutup TexasTrumpHater”
Another lying post ...
irishjuggler wrote: “It’s not a huge mystery how these algorithms work... they’re basically just using price-per-sq-ft sales data for your location and multiplying it by the size of the property and perhaps tweaking it a bit based on number of bathrooms, amenities like swimming pool etc,”
Essentially the same process used by professional home appraisors.
I don't know how they ever convinced people to pay for property taxes...When the greedy in government first started property taxes I honestly don't know who they got anyone go go along with it.
It went something like this, "Hey, we here in government are going to start charging you to live in the home you own. Yes yes, we know you OWN it, but we want our cut. So pay up sucker or we'll seize your home and throw you in the street. You only think you owned your home sucker. But the ugly truth is, we in government own your home. Pay up stupid or else!"
“are” screwing up? HAVE screwed up is more accurate. I never saw such a line of misleading and inaccurate claptrap. Their values are just plain nucking futz. They have even screwed up realtors. There is a house down the road clinging to a zestimate and it has been on the market now for going on FIVE years. It isn’t selling because it just isn’t worth the price marked on it. Price to sell or don’t put the house on the market.
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