Their Zestimates are out of this world.

April 21, 2015

It never ceases to amaze me how anybody can even consider Zillow’s estimates for real estate values.  I find it so difficult to believe their algorithms are even fact-based.  Zillow must make this stuff up.

I have no idea how Zillow works in other parts of the country’s real estate market but here in Monterey County – well, I can state numerous listings with zilly Zestimates that are out of this world

For instance, my associate at Bay Homes & Estates listed a mobile home belonging to the mother of an old high school buddy of mine in one of the most desirable mobile home parks in Marina, California.  After much deep analysis of past sales and current market trends, we arrived at a list price of about 80 grand.  It’s still on the market after 14 days with only two all cash offers.

Are you ready for Zillow’s Zilly Zestimate?  $398,813!  That’s three hundred ninety-eight thousand dollars and some change.  Now I know why bloggers came up with the acronym WTF.  There’s just no other expression to explain such silliness. Oops.  I meant to say, zilliness.  I could even write a simple algorithm to give a more accurate value.  I surely hope Zillow is not paying their coders big bucks.

I have a broker friend that just listed a 3 bedroom 1.5 bath home for $499,500.  After 7 days on the market it is now pending with an over-list offered price.  Let’s look at the Zesitmate - $372,166.  Oh my!  How zilly is that?  I’m so thankful that real buyers don’t pay any attention to zilly Zillow.

But the other automated valuation models (AVMs) are not too much better either.  Our own MLS is in cahoots with Realist, which does have some very good information on real estate in general.  However, their AVM value is off-base.  At least Realist has a confidence score which measures the available quality and quantity of data in a clear and consistent manner.  So they say.  They also have a Forecast Standard Deviation (FSD) “to create confidence that the true value has a statistical degree of certainty.”

I pray to God that the robotic AVMs used by the powerhouse real estate portals don’t take over the valuations established by human REALTORS.  We’re in the trenches and we see what is going on.  We go inside houses and in the neighborhoods so we are absolutely knowledgeable about property values.  There is no “statistical degree of certainty”.  We are always right on with our pricing … usually.  The AVMs … well, not so much.  Especially, Zillow; they zuck.