During a recent interview on CBS This Morning, Zillow CEO, Spencer Rascoff, acknowledged the accuracy of Zillow’s zestimate, widely used by home buyers and sellers alike to gauge property values, as having a “median error rate” of about 8% nationwide. However, as real estate is local, that number is likely to increase drastically depending on each market. For example, in the Los Angeles area, the median error rate for Zillow’s zestimates, is approximately 20%. And with a median home price on single-family homes of $464,650, that’s a difference of $92,930. That is significant. So, what is the solution?
This is where an experienced Real Estate Agent becomes valuable. Any Real Estate Agent worth their weight knows their market, because s/he are immersed within the neighborhood, studying the market regularly (sold properties, new listings, off market, cancelled, etc.) so obviously, they are most likely to know what the true market value is to list your home for, or what’s the best price to offer on a purchase.
Zillow is a good reference point, a rough overview. Not the bible.A better option is to seek guidance from a licensed REALTOR®, who will provide you with a free evaluation of your home’s value and the current market or an analysis, should you be in the market to purchase a home. So, unless you don’t mind having the home you’re selling sit on the market for a long period of time, or if you’re a buyer and want to decrease your chance of being outbid by the competition, then find a licensed Real Estate Agent that will lead you in the right direction.
Sources: Inaccurate Zillow ‘Zestimates’ a source of conflict over home prices(LA Times, Feb 8, 2015). California’s housing market returning to normalcy as year ends (C.A.R., Jan 15, 2015).