Charlie Wills on LinkedIn: Zillow Myth: my house is worth....We see this a lot in our market… (2024)

Charlie Wills

Real Estate Broker | People Before Properties | Visionary | Philanthropist | Entrepreneur

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Zillow Myth: my house is worth....We see this a lot in our market. Zillow Zestimates are just a computer algorithm used to determine value. Not hard data and with no understanding of the market, features, location, schools, etc they can not predict accurately pricing. I am using my own house to show the market sales in the second image versus Zillow Zestimate of adding every sale that has taken place in the past year to my estimated value. Every market is specific and values have not fallen as shown by Zillow in the first image. Pricing is up in the general market 7% not down 1%. Plus the shortage in the inventory is still causing the market to keep prices high and demand high. Make sure you check with a professional who understands and knows the market intimately.#badgerrealtor #zillowmyths #realestate #Madison

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Gary Frederick

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Charlie , right you are! We experience the same issue in the auto industry with Kelly Blue Book

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Damian Christianson, PMP

Project Manager Coach🔷Strategic Senior Project Manager🔷Global Technology Integration & Agile Transformation🔷Passionate about Driving OCM in Complex Environments🔷Success in $25M Initiatives🔷 Agile, PMP, OCM

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One of the lessons to learn from your example is data models have their limitations. Models are getting better with effort and more data input and/time to see how the results are off, but they have limitations. Models always will. A great exploration of the many instances of this is explored in "Weapons of Math Destruction" by math scientist Cathy O'Neil (easy listen/fun attitude/good examples) - https://www.audible.com/pd/Business/Weapons-of-Math-Destruction-Audiobook/B01JPA41ZU

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Damian Christianson, PMP

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Good point, but actually Zillow is all hard data. AVM -Automated (Property) Valuation Models use public data and data models to determine the valuation. If is you want a mortgage, you need to get a matching valuation from these AVM or the mortgage won't go through. That is its strength and its limitation. The data is very helpful in understanding the market trends and what is happening in the area. Just ask appraisers and mortgage underwriters - they are relaying on the data (sometimes Zillow, sometimes other aggregators, sometime both) to help their valuations. But there are limitations to computer models. You pointed out some of them. The biggest limitation is the limited amount of transactions in close proximity available to model from. One sale carries too much weight. But underwriting wisdom before the 'crash' was that one foreclosure would affect home values 1.5% down for all homes within a 2 mile radius. It seemed too much until the crash of '08 proved many of the underlying concepts spot on.

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Charlie Wills on LinkedIn: Zillow Myth: my house is worth.... We see this a lot in our market… (2024)

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