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 ...
Plank #1 of the Communist Manifesto: Abolition of property in land and application of all rents of land to public purposes.
As we both know, once “property taxes” are instituted, government owns your property and failure to pay your tax, AKA rent, results in its confiscation.
In other words, property taxes are the fulfillment of the first plank of the Communist Manifesto.
Zillow works best in large neighborhoods where a lot of houses are “cookie-cutter” and very similar.
In older or more rural neighborhoods with wide variations between houses the margin of error can get very high—particularly if public records are either inaccurate or not up to date.
And you neighbors of the seller? Fix those damn HOA violations that the agent ratted you out for so she can get a higher commission on her client’s house. All higher home values benefit are sellers, RE agents and the county real estate tax collector. The poor suckers are the ones left behind, staying and getting stuck with the higher comparibles and taxes.
It’s a mystery how our ancestors failed to hang the cretins when it was first attempted. Nowadays normalcy bias seems to keep people tolerating outrageous treatment by government bureaucrats or ‘feeling’ it’s just fine.
“In older or more rural neighborhoods with wide variations between houses the margin of error can get very high—particularly if public records are either inaccurate or not up to date.”
That’s a great point. In my city, San Franciso, you can seen brand-new high-end condo construction on the same block as some 150-year-old house that has had “deferred maintenance” for its last 140 years. Those situations confound the algorithms.
4% local sales tax,
the 6% state tax,
the property tax,
the personal property tax,
the excise tax on cars,
the car tag tax,
the toll road taxes,
the fuel taxes,
the state income tax etc. Not to mention the whole gamut of federal taxes
How many have I missed?
Your example is really complex—because the true value of the old house (defined as the value of the best and highest use) is probably the value of the land minus the demolition cost of the house.
:-)
“They have even screwed up realtors.”
That could be a good thing! Are you a realtor?
Zillow is pretty close right now in deep-South Florida, where I’m looking right now.
A couple of years ago, their Zestimates were really exaggerated.
The Zillow number means nothing.
But I can see how uneducated home buyers or sellers could think it’s accurate
I’d rather hold on to a Redfin estimate. It’s usually way higher.
“A couple of years ago, their Zestimates were really exaggerated.”
Not exaggerated. A victim of a mad market. The house next door sold about two years ago above the Zestimate.
No doubt
That’s another good point, and yet all of that might be further confounded by historical preservation laws that might prevent demolition. It’s not unknown in San Francisco for developers to dig up and physically move some old dump to another location because they can’t get clearance for the new project without preserving the old dump in one way or another.
100%
The only mystery to me is how in hell did they get anyone to go along with these punitive Communist property taxes?
And what do these local, state and fedgov do? They keep raising the taxes on the homes that are allegedly owned.
Property tax. It’s one big colossal con-job.
You bet. Most realtors are no better than used car salesmen. Who else can pocket $20,000 ++ for taking a few pictures and doing some repetitive paperwork.
Historical preservation in San Francisco is an amusing concept.
Most of those old structures are one decent earthquake away from demolition anyway.
:-)
My home’s Zillow and Refin estimates often vary by over $200,000. But Redin is always the lower estimate.
The king would grant land to vassals, who in turn would owe the king money, or grain, or soldiers.
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