Monday, December 22, 2014

As 2014 comes to a close, has Zillow figured out how to accurately estimate Sacramento home values?

If you have been reading my blog for a while, then you probably already know that I usually get a chill down my spine when one of my clients mentions "the Z word." What's the Z word? Zillow. What is Zillow? Zillow.com is a website that, among other things, provides information about neighborhoods and properties.

Zillow is a neat website. I have an agent profile on Zillow. I have clients who have found me using Zillow. However, my general thought about Zillow is that while it's a fun consumer tool that provides property information to people looking to buy or sell (or even rent property now), the vast majority of the time, the "Zestimate" (aka, the value that the website dreams up for a certain property), is usually not close to the market value of a Sacramento area property, and the homes listed for sale on the website are not current.

I posted a few times last year about how the sales prices of my transactions compare to Zillow data. I've closed 10 transactions in the last couple months so let's take a look to see how close Zillow is to the actual selling prices of these properties. This information is CURRENT as of today, December 22nd, 2014.

2 Alvares Court, Sacramento, CA 95833; this was a nice updated home with a pool that I sold (represented the buyer) in the Natomas area. The original listing price was $235,000, and sold on 9/15/14 for $235,000. Zillow's Zestimate: $226,000 -- approximately 3.8% below it's selling price. 
 
2480 Sandpiper Way, Cameron Park, CA 95682; this was a beautiful home with a view that I listed (represented the seller) in the Cameron Park area. The original listing price was $359,900, and after multiple offers this sold on 10/15/14 for $362,000. Zillow's Zestimate: $340,522 -- approximately 5.93% below it's selling price. Ironically, Zillow does not note the recent home sale...

11532 Linday Way, Gold River, CA 95670; this was a bank repo home I sold (represented the buyer) in Gold River. The original listing price was $374,900, and this sold on 10/15/14 for $340,000. Zillow's Zestimate: $381,702 -- approximately 10.92% above it's selling price.

6725 Swenson Way, Sacramento, CA 95822; this was a home I sold (represented the buyer) near in South Land Park on a HUGE lot. The original listing price was $449,000, and this sold on 10/17/14 for $437,000. Zillow's Zestimate: $391,758 -- approximately 10.35% below it's selling price.

3716 Lankershim Way, North Highlands, CA 95660; this was a home I listed and (represented the seller) in North Highlands in Sacramento. The original listing price was $149,900, and after multiple offers this sold on 10/22/14 for $159,500. Zillow's Zestimate: $142,915 -- approximately 10.39% below it's selling price.

329 Berthoud Street, Sacramento, CA 95838; this was a short sale home I listed and sold (represented the seller) near the Natomas / Del Paso Heights area. The original listing price was $169,000, and after learning it needed about $20,000 in work between the termite and roof inspections, it finally sold on 10/28/14 for $155,000. Zillow's Zestimate: $153,574 -- approximately 1% below it's selling price.

2180 Irvin Way, Sacramento, CA 95822; this was a cute updated home I sold (represented the buyer) in Hollywood Park. The original listing price was $275,000, and this sold on 10/30/14 for $258,000. Zillow's Zestimate: $224,040 -- approximately 13.16% below it's selling price. WOW.

5000 Priscilla Lane, Sacramento, CA 95820; this was a cute updated home I listed and sold (represented the seller) in Colonial Village. The original listing price was $169,900, and this sold on 11/20/14 for $162,000. Zillow's Zestimate: $153,372 -- approximately 5.3% below it's selling price.

4436 Wyman Drive, Sacramento, CA 95821; this was a home I sold (represented the buyer) in Arden near the Carmichael border. The original listing price was $265,000, and this sold on 11/20/14 for $260,000. Zillow's Zestimate: $251,937 -- approximately 3.1% below it's selling price. 

5020 Kokomo Drive, Sacramento, CA 95835; this was a short sale home I listed and sold (represented the seller) in Natomas. The original listing price was $259,900, and this sold on 11/25/14 for $265,000. Zillow's Zestimate: $246,126 -- approximately 7.12% below it's selling price. 

I have said it before and I will say it again...I think a couple conclusions can be drawn from the information above. First, Zestimates are generally not accurate - so if you are thinking about buying or selling, you can see that the values generated by this website are all over the board higher or lower. They don't take into consideration property features that can not be quantified. Is it on a main street, is it near a park, was the kitchen remodeled, does it have unique architectural features...? Second, some area neighborhoods have a lot of varied housing stock - they are not cookie cutter homes. Some areas in the same zip code have drastically different values or pricing trends. Third, our dynamic Sacramento area real estate market has changed significantly in the last couple of years, and Zillow has a long way to go to catch up to pricing these trends and factoring them into their mathematical equations that determine these values. But it is still a fun website for entertainment purposes. 

If I can assist you determine an accurate price range for your Sacramento area home, I welcome your call or email.

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