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February 7, 2012 | No Comments Yet
Baltimore Zillow Zestimates are still often off from true value, despite the change in algorithms last year.
“Desktop Valuations” are a quick way to look at the potential value of a home, but they do not take many factors into consideration, and some of the things they DO use to determine a value should not be used!
I answer questions on the Zillow site, and so many times the questions come from a place of, “Why, in my townhouse community where the houses are very much the same, is my neighbor’s worth $XXX and mine is worth $45,000 less despite mine being an end unit with an additional bump-out?”
That is a very good question, and one that doesn’t have a good answer. The algorithm takes into account the taxes you pay and when the house last changed hands. If a house hasn’t changed hands in some time, the taxes generally are lower, and that would bring the “value” of that house down. That just doesn’t seem right, does it?
Next to this is an example of the “range” of value for one house I found. If a professional real estate agent walked into your house and told you they thought it might sell for somewhere between $391,000 and $740,000, would you feel comfortable that the agent knew your market?
How about the houses “for sale nearby.” Do these look like they belong together as a picture of a particular Towson community to you? They seem to be a random selection of homes that happen to be in the same zip code.
The biggest issue is the quality of the Baltimore Zestimates.
As you can see here, Baltimore Zestimates are within 5% of an actual sales price only 42.6% of the time. They are within 10% of an actual sales price 66.4% of the time. They are within 20% of a sales price 83% of the time. These are with a median error of 6.1%.
On a $400,000 sales price, the Zestimate may show $380,000 or $420,000 — but again, that is only 42.6% of the time.
To get above 50%, you have to go within 10% of the actual sales price. So on that same $400,000 house, a Zestimate 66.4% of the time will be from $360,000-440,000.
To get to the closer 83%, you have to bring that out to 20% of a sales price. That could drop the Zestimate down to $320,000. Would you as a Baltimore seller be happy with that if your house were truly worth $400,000? How about a homebuyer? Would a Baltimore homebuyer be happy to pay $480,000 for a house that is really worth $400,000? Probably not. And the buyer’s mortgage company most likely wouldn’t let it happen, because an actual appraisal would most likely be close to the true market value of $400,000.
And don’t forget — that is with a median error of 6.1%, or approximately $24,000 give-or-take, on that $400,000 house.
Real estate everywhere is LOCAL. Hyper-local even.
Baltimore real estate values can be different street-by-street!
For a true understanding of your house’s value, don’t count on automated valuation websites. Contact me for a true idea of you Baltimore house value. I’d love to help!
Would you like to know more and see additional Zillow issues in the Baltimore area? See my past posts on incorrect Towson Zillow Zestimates for details.Tags: Baltimore, Baltimore County, Baltimore County Real Estate, Baltimore House Value, Baltimore Real Estate, Blog, Buying a home, Buying Tips, Timonium Real Estate, Towson, towson house value, Towson Real Estate, Towson Zillow Zestimate, zestimate, Zillow, Zillow Zestimate, Zillow Zestimates, zillow.com
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