Misleading Towson Zillow Zestimates Explained Further

As I wrote March 2, Towson Zillow Zestimates in general, are statistically off by a large amount.

Last week I had a client call me because his HELOC was reduced by a large amount right in the middle of construction to improve his home. He could not understand how the bank could make the determination that his Towson house value had dropped over $200,000 in the past 18 months since he opened his HELOC.

Upon speaking to the bank, the representative pulls up Zillow, and proceeds to tell him this is how they discovered the value change.

“Is this true? Has my value really dropped by THIS much? I knew we were in a depressed market, but did not think it was THIS bad,” he asked me.

Based on a true market analysis, his value has really only dropped by $25-50,000. So how is Zillow off this much?

Enter the powers of social media!

I was able to find both the COO & the Director of Community Relations for Zillow on Twitter.

I contacted COO Spencer Rascoff and he tweeted back:

“Lenders shouldn’t rely on Zestimates. Use an appraisal.” “We have “a Zestimate is not an appraisal” language all over the site. http://twurl.nl/7lj6mc “

He then emailed me directly because he wanted to get to the bottom as to why they are so far off.

Director of Community Relations David Gibbons tweeted:

“…it may not change outcome by he {sic} can’t reduce heloc based on Zestimate alone.” “Lenders are supposed to use commercially licensed AVMs & appraisals, not Zestimates!”

While they are both correct, and I agree with them wholeheartedly, lenders ARE using their site, and if the site’s purpose is to provide real estate information, then the site should be more accurate.

Through emails and more discussion, I was able to find out more about how the Zestimate values are determined.

David direct messaged me that it: “looks like your purchase price and taxes have the biggest impact on your Zestimate…”

I asked what that had to do with a current value of a home, because there is no correlation whatsoever in the real estate market from what you paid for it and what it is worth now.

His answer: “homes only sell on average once every seven years so when figuring out what a home is worth its last price is important – though 2002 is…we count past sales in less and less over time … a sale last year would have much greater impact.”

NO WONDER the values are off so dramatically. And if Zestimates continue to be calculated in this respect, then we should be looking for values to be tremendously off in 2013-2014 in the other direction. So my client can be assured that in 3 years his Zestimate should be approximately $200,000 OVER true value!

Please be aware that the Zillow Zestimates, at least in the Towson market area, may have no relationship to the true value of any home.

This reiterates the point that REAL ESTATE IS LOCAL and, as COO Rascoff wrote: “a Zestimate is not a replacement for a real estate agent. Far from it.” For your free Towson Home Price Estimate, contact me today!

19 Clarion Court – The Abbey at Sherwood
Cockeysville, Maryland – Offered at $499,900

Well maintained single family Colonial in the Abbey at Sherwood subdivision off of Sherwood Rd in Cockeysville, Maryland – south of Hunt Valley and north of Timonium.

**Update June 30, 2009: CONGRATULATIONS, SELLERS! WE SETTLED JUNE 30!**

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**Congratulations, Sellers, we are under contract 5/21/09!**

• Download the Brochure (PDF)
• Schedule an Appointment
• Ask a Question

Explore this beautiful Cockeysville home for Sale at $499,900…

• Neighborhood
• First Floor
• Kitchen/Family Room
• Second Floor
• Finished Basement
• Exterior and Features

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Real Estate Agent Social Media Networking Presentation for Women’s Council of Realtors in Baltimore

Thursday was a wonderful day — great weather, great people, and I had a blast presenting at the Greater Baltimore Board of Realtors (GBBR) to the Women’s Council of Realtors (WCR) on social media networking for real estate agents.

I was asked to present based on my experience and success using social media to enhance my Towson real estate business.

The four networks I discussed were Facebook, ActiveRain, Linkedin, and Twitter.

Although I also actively participate on Trulia and Zillow, I only had 20 minutes to present! On May 21, 2009, I have been asked to present a follow up because there was so much interest from the Baltimore realtors.

I met some fantastic people, and enjoyed speaking with many of the attendees afterwards. I am looking forward to the next presentation, and will also be teaching another 1.5 CE credit course on the same topic for GBBR on May 28, 2009.

11626 Hunters Run Drive – Hunt Valley Station – $550,000.00

A Fantastic Single Family Home on Hunters Run Drive in Hunt Valley Station
Four Bedrooms, Two Car Garage, Large Deck and Hardwood Floors Throughout

**Update July 13, 2009, CONGRATULATIONS! WE SETTLED!**

**Update May 5, 2009, Congratulations sellers, we are UNDER CONTRACT!**

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Homeowners awarded an average of $693,000 for losses in Jacksonville House Values due to Exxon Spill

Jacksonville, Maryland is a quiet area in Northeast Baltimore County. The area is also known as Phoenix, Maryland.

Life there was generally uneventful until one fateful day in 2006 when an underground pipe at the Exxon Gas Station at Jarrettsville Pike & Paper Mill Roads began to leak — releasing 26,000 gallons of fuel into the ground.  The leak was not detected for 37 days due to an alarm reset issue.

After that, Jacksonville homes in the area had their wells contaminated and house values plummeted.  While homes in the neighborhoods used to sell for anywhere from $300,000 to over $1 million, they were basically unsaleable.  The leak exposed homeowners to to methyl tertiary butyl ether (MTBE), which has not been conclusively linked to cause cancer in humans, but has not been determined as safe either.

After a five month trial in Baltimore County Circuit Court, a jury awarded the homeowners about $150 million as compensation for the drop in their value of their Jacksonville property, their pain and suffering and for medical monitoring.  The average award for the drop in property values was $693,000.

Forbes reported on the verdict in favor of the plaintiffs, also indicating that not all homeowners were happy with the result.

Though I am pleased that the jury found in the homeowners’ favor and that they were awarded compensation for this preventable mess, I am saddened that this beautiful area now has this stigma attached to it.

My hope is that the MTBE will filter its way out over the next few years, and this can just be a horrible memory, though I feel that the likelyhood of that happening is unfortunately slim.

Construction has begun on the Charles Street overpass at 695 and 83 Interchange — Will this effect Towson House Values?

Have you been on North Charles Street in Towson recently and wondered what is going on? Or have you been driving around I-695, merging over to I-83 North, and been curious about where the trees have gone?

Well, the bridge over 695 is being rebuilt, like the ones at Dulaney Valley, York Road, and Reisterstown Road.

The Maryland State Highway Administration has a comprehensive plan laid out that began just last month, with an anticipated completion in Fall of 2011.

So, what does this mean for those of us who drive these roads every day? Who live right at that Interchange? Charles Street will have lane closures, usually one in each direction during this time period. Certain times during the construction 695 will have lane closures 8 pm- 5 am. The best location for this information is the Project Newsletter from the SHA, which I have a link to here. These will be updated over the next two and a half years, and I will be sure to keep you updated as the construction continues.

And now, to the Towson House Value question. Will this affect your home price?

• If you live right around where the work is being done, and you want to sell while the construction is happening? Then, well, yes.
• However, if you plan to sell after it is over? Then it will likely help improve your Towson home’s value. There will be a traffic signal instead of the roundabout on Charles.

There will be new sidewalks and bike lanes along Charles street, and along Bellona to Othoridge Road where Orchard Hills Park is located.

The mess that has been traffic along there will be cleared up (thank goodness!).

So, in the meantime, stay tuned. Be calm. Be patient. And know this will be for the best in the long run. Take alternate routes from 695 at York Road or at Timonium Road at 83. And if you need any real estate advice during this time? Well, simply, contact me!

Zillow Zestimates for Towson Real Estate May Be Misleading

Have you ever wondered about those “Zestimates” from Zillow.com ? How accurate are they really?

I pondered this recently, as a listing I have coming on the market in Hunt Valley has a Zestimate about $40,000 LESS than the value determined during my true, in-depth market analysis as a licensed Towson Real Estate Agent. (On the other hand, using their “My Estimator” tool brings the value up to over $110,000 HIGHER than its true value!)  Read more

Pleased to see this Towson House Sell

Each day I drive my son to or from school, I drive up Thornton Road. There has been a For Sale sign outside this one house for a very long time.

To my delight yesterday, I saw the UNDER CONTRACT sign rider up — YAY!

For those of you who may not know, Thornton Road runs from Joppa Road in Towson up to Timonium Road in Timonium. At Seminary Avenue the zip code switches from 21204 to 21093.

On January 30th I wrote about the great pricing strategy of the townhouse in Timonium that sold in a few days. Well, this is just a mile & 1/2 down the road!

A cute cape cod, single family home with a great addition off the back, and fantastic curb appeal, this home was for sale much longer than expected. Yes, it has its drawbacks, namely the busy road, but it is also very conveniently located in close walking distance to Riderwood Elementary School, which is a blue ribbon school with tennis courts, playgrounds and lots of open park-like space. So why was this house on the market for 248 days? You can’t change location. Its’ condition is wonderful. The only thing you can change in price. They began up near $500,000 and re-listed at $475,000. The asking price at time of contract was $469,000, which does not mean that is the contract price.

So what does this all mean?

It means sellers have to get serious when it comes to pricing their houses if they want them to sell more quickly. This is a learning experience & market for all of us right now, and we agents are learning the curve as well. We can track data and work to predict where the price should be. And though that information may be hard for some sellers to hear, it is a necessity in order to get your home sold. Let’s get it done!

Baltimore Housing Market Gaining Strength

Yes folks, you read that right, the Baltimore Housing Market is Gaining Strength.

What? What was that? The sound of glass breaking? Crashing to the ground in disbelief?

Well, believe it, and I have proof.

My phone, which, for awhile now, I will admit, I thought only made OUTGOING calls, has been ringing. A LOT. Since MONDAY. The spring-like weather? Maybe. The optimism of the new economic stimulus bill? Very likely!

All I know is that I had a house on the market last year in Hunt Valley that we removed from the market to have the home painted, “stuff” removed, and lay low for a little while. SINCE MONDAY I have received three phone calls — one from a perspective buyer, TWO from buyer’s agents who wanted to know, CAN WE SEE IT? When is it coming back on? (The great house: 11626 Hunters Run Drive – the photos will be updated once I get to take the new ones with the fresh paint, cleared out & staged rooms!)

Contracts are starting to flow in & out of my Timonium Real Estate Office. Baltimore Real Estate buyers are starting to realize that they need to get in NOW while the prices AND interest rates are LOW.

So, yes, I am optimistic and excited. There is SO much opportunity in this Baltimore real estate market whether in the Baltimore City real estate market, or the Towson real estate market, or even in the Timonium real estate market, and I urge buyers to take advantage NOW!