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January 26, 2013 | 2 Comments
Towson Zillow Zestimates continue to be incorrect and problematic in the public’s understanding of the value of a home.
I listed a Towson home that will be coming to the market in March. We have completed our paperwork, and are readying for the Baltimore real estate market.
One thing we discussed was their rather low Zillow Zestimate, and how the sellers should claim the house and make corrections on missing items and errors.
I found it really odd, though, that the Zillow Zestimate would be over $110,000 lower than the price they bought the home for TWO YEARS AGO. As far as I can tell, the market has IMPROVED since 2011 in the 21204 zip code. How could it have dropped over 20% when our market is showing a marked IMPROVEMENT over that time period?
Let’s go to the Zillow numbers.
The Zestimate range for this house is $167,000 – $953,000. Wait. The site is telling me this house is worth SOMEWHERE between $167,000 and almost $1 MILLION? Jeez. I could have told you that without seeing the house, running numbers, or knowing ANYTHING about the market area. Oh wait…
There is essentially NO DATA on this house apparently not provided to the site from Baltimore County. No bedrooms, no kitchen, no bathrooms — no WONDER the algorithms have NO IDEA how much the house is worth.
As I have done in the past, I took an additional look at Data Coverage and Zestimate Accuracy for Baltimore, this time specifically the County. Baltimore County Zillow Zestimates are within 5% of a sales price 34.2% of the time (An F in school.) Within 10% of an actual sales price: 60.4% of the time. (D- minus.) Let’s go even further. Within 20% of a sales price? 80.7% of the time. (So, B- minus.)
What does this mean?
For a house that will sell for approximately $600,000 on the open market, on average, a Baltimore County Zestimate is off more than $30,000 in either direction 65.8% of the time. It are off by as much as $60,000 in either direction 60% of the time. Only when within 20% of a sales price (which in this example would be $120,000 IN EITHER DIRECTION) is it within range — and that is only 80.7% of the time! Oh, and did I mention that is with a median error of 7.8%? (Which means, per the site: “Half of the Zestimates in an area were closer than the error percentage and half were farther off.”) (Or, just add on an additional 7.8% to any of those margins above.)
If you knew your home were worth about $600,000, would you be OK with accepting $480,000 for it?
How about a buyer, who wants to pay fair market value for a house. On the same scale, then he or she should be OK with paying $720,000 for it, right?
Baltimore homebuyers and Baltimore home sellers need to be aware that Zestimates are NOT a good way to figure out a value on a house. They are not very often close or accurate!
If you would like to know your Towson house value, then contact me. I would love to help!
Other posts on Towson Zillow Zestimates:
A New Low for Incorrect Zillow Zestimates (This one is fun!)Tags: Baltimore, Baltimore County, Baltimore County Real Estate, Baltimore Real Estate, Blog, Buying a home, Buying Tips, Selling Tips, Selling Your Home, Single Family Home, Timonium, timonium house value, Timonium Real Estate, Towson, Towson Home Price Estimate, towson house value, Towson Real Estate, Wells Fargo Class Action lawsuit, Zillow, Zillow Zestimates, zillow.com