Monthly Archives: September 2012
Trust Your Source
There are many pieces of information at the disposal of today’s real estate consumer including tools designed to estimate the value of residential properties.
The most widely used and perhaps the most misunderstood valuation tool is Zillow’s Zestimate. Real Estate owners often use this tool to both estimate the value of their property and to set the listing price when it is time to sell. Prospective buyers use the Zestimate when making offers on properties that are for sale.
But how accurate is the Zestimate? Zillow measures the Zestimate against the actual sales price in their top 30 markets. In these top 30 markets, the Zestimate is within 1o percent of the actual sales prices roughly 55 percent of the time, meaning 45 percent of the time it is more than 10 percent off. For example, a home with an actual market value of $300,0000 has a 45 percent chance of having a Zestimate over $330,000 or under $270,000.
Zillow’s Zestimate is fun and interesting. It is perhaps useful to track trends in the market. It should NOT be used as the sole method of valuing a property.
Question: Does my tax value reflect true market value?
Answer: In most cases NO! In fact over the past year homes that sold for an average of $350,000 had an average tax value of $400,000