For all of the documented ills attached to Zillow’s home valuation estimates, the simple truth is here in the Phoenix area where tract homes are the dominant feature on the landscape, Zillow’s zestimates usually are somewhat close.
Somewhat, because the one important piece of data Zillow doesn’t take into consideration in its metric is what currently is for sale in a given area. (Active listings can’t take this into consideration because Zillow, try as it might, doesn’t have all of the listings.)
A zestimate based on past sales may be useful in determining the current value of the home as an academic exercise, but doesn’t give any real indication of the current market value because the current market is being ignored.
Here’s a real-life example …
- Closed listing, $108 per square foot
- Pending listing, $145 per square foot (list price, not closed sale price)
- Active listings, $243, $168, $143, $147 and $114 per square foot.
And Zillow’s zestimate? $181 per square foot. And that’s what the homeowner to whom I spoke this morning want to hang his hat on. But take a look at the numbers above and tell me where there’s even the slightest possibility of $181 per square foot being viable? Not even all of the traditional “yeah, but” scenarios (yeah, but my home’s nicer, etc.) can make up almost $40 per square foot.
If you just are curious about what your home might be worth, Zillow away. But if you’re serious about selling, the last thing you should do is trust a zestimate while turning a blind eye to all of the evidence in front of you. A zestimate is little solace as the for sale sign begins to yellow in the sun after months and months of exposure.[tags]Phoenix real estate, zestimates[/tags]