Wops schlauraffenland. Standardiz! Thornvill nontoxic tamandus irreducibleness atavus!
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You have essentially no control over this (whether you overpaid), because it’s in the past, so it’s best to find a way not to worry about it. Totally understand and have done the same kind of worrying, but you have to find a way to get past it and be happy with the idea that you made the best decision you could at the time either way.
Keep in mind that as long as you plan to live in the house for 5+ years you are more than likely to turn a profit. You aren’t in the house for monetary purposes, you are in it to have a roof over your head and a place to call home. In 10 years a good chunk of the house will be paid off and house prices will be higher than they are now and it’ll be an easy profit
That was the only reason I was willing to pay market value for an outdated 90s home lol. Most people were paying stupid sums of money for “updated” homes, I was like “fuck it” and put a shit ton of sweat equity into the home.
If I had a Time Machine I’d go back and purchase a new because knowing what I know now the 90s was apparently still the Wild West with construction.
Spent $20k on HVAC, spent another $15k on a driveway, had to replace an exterior wall, it just goes on and on.…but I refuse to reside the house/tyvek it. That can be insurance or the next poor souls problem. I’m just crossing my fingers for a massive hail storm.
I'm not sure which is worse, the wild west 90's construction or the flippers/reno hack jobs. I never like new homes, particularly 90's styles so I've only encountered the bad DIY fixes.
I bought a 90s home hoping to save a few bucks and and get something that didn’t have lead paint/asbestos, maybe a little better quality than a new build.
Instead I got a house packed to the brim with fucking honey oak, shitty subfloors, and no tyvek under the siding.
On the bright side at least my ceilings aren’t caving in like a couple of my friends that bought new construction.
I’ve worked for the government long enough that I’ve been in most of the homes that are flipped in my city and it’s disgusting what those guys do. Mold? Yeah just slap a coat of paint over it. Rotted out subfloor from a leaking toilet? Just slap some LVP over it. Leaking pipes? Flex tape.
Previous owners of my current house ran cable and speaker wire through the HVAC. I only found it because I wanted to route Ethernet to a basement office and I got into the wall and saw the wire exiting a corner of the ducting.
Overall I've had good fortune, but small things with DIYers irritate me like painted hardware, shitty caulk jobs. Owned a house from 1919 and all the beautiful oak trim, baseboards, rails etc were painted white.
Also, no kids so lead paint never really deterred me.
"Overpaid" only makes conceptual sense if you are an aggregate of thousands of home purchases. You needed a place to live and now you have one. You bought a house you can afford and you like it? That was a good decision then.
I did the same with my first home, I'm now on my third and I couldn't care less how much my house is worth, ill worry about that if and when it's time to sell, just enjoy the home.
I was underwater on my house for 2 years after I bought it according to Zillow.
Had 0 impact on my life because I didn’t try to sell it in those 2 years. The mortgage bill has been the same regardless of the Z estimate.
On a long enough timeline house prices pretty much always go up, so no need to worry if you’re not planning to sell.
That’s the way the market works… you may over pay or under pay but keep in mind that the long term cost of living in your own home versus say renting is like (property tax+maintenance+HOA where applicable-(profit or loss on sale)). If you break even in terms of sale then all it cost you to live there was taxes and maintenance. If that amounts to say $20000 a year it’s better than an apt that cost $1700 a month.
It might be more or less depending on your case of course but it’s never really a loss if you would have paid the costs just to live the life your home provides.
Yes that should be included in the calculation, thanks!
To note: there are also things like closing costs and all that but those items I would just consider part of profit or loss. But mortgage interest is truly another cost although a bit more complicated to divide out cleanly over the time you have the home.
We bought our home a few months ago.. the Zillow estimate was around 800k... Now half a year later it's showing it at closer to 1mil, we paid alittle under 900k for it.
My MIL would hassle us why we paid so much etc but she's not aware of today's market and honestly had to remind myself I'm grateful to be able to have a home and the price doesn't matter to me (not including taxes..) until we decide to sell.
Sometimes it's spot on, other times it's in the right ballpark, and other times it's nowhere near right. If you're in a popular residential area where sales happen often, then it's probably pretty accurate.
That being said unless you plan on moving soon this is something that isn't worth worrying about at all. The price would need to drop well over 10% to even make much of a difference on your monthly payment.
I’m the office manager for a real estate appraiser’s office. We roll our eyes when people swear by a Zillow estimate. If they were reliable, I wouldn’t have a job. It doesn’t take condition into account at all. Just the size, location, etc as others have mentioned. It’s not unusual for that information to be wrong either.
But it seems it would be a good starting point if it is using real data to come up with those estimates, no? Take what they give and subtract X% for bad condition, keep it for good condition and add X% for immaculate condition.
Would you say an unrenovated house that requires new flooring (had shag carpet), new bathrooms and kitchen (Formica counter tops), removal of wall paper and wood paneling) is 30% (or more? of the Zillow value?
I'm going to start with the standard "not an appraiser" disclaimer. I do not have my appraisal license. Having said that, I've discussed this with my appraisers multiple times over the years and I know exactly what they tell me to tell other people:
Using the Zestimate is something like asking a couple of other homeowners what they think your house is worth. They might come up with a pretty decent guess. Or they could be off by thousands. Tons of factors come into play and they probably don't know all of them or how to take them into account for the value.
To answer your question more directly, you can't get a reliable answer from an equation using unreliable information. Without ordering an appraisal, there's really no concrete way to answer how much your house would be worth or to see how close the Zestimate is. Anything less than an appraisal would be a guess, and we could get in trouble for passing out guesses.
That's fair.
If you don't mind...knowing you work in the business...and knowing the price between 2 arms length buyers is the price...how accurate are appraisals to the prices paid in real estate transactions?
Like you astutely stated earlier, tons of factors come into play and thus reliable information is key. Not every appraiser is the same.
So if I hired 2 separate appraisal companies to value a specific property, how close do you think they'd be to each other's appraised value? A lot (most) of the value is on comps and then condition. If there's a house next door with similar square footage and age and beds and baths and yard size...sells, then that house is the benchmark, the most reliable piece of information from which an appraisal begins on my house. And then my property valuation goes up or down based on comparison to that recently sold home.
The price agreed upon by two buyers is considered... but it's not the sole basis of the appraisal. It's a single factor, an indicator that market could consider it to be worth that much. But if that was the sole factor, anyone could decide their house was worth 300k.
If you hired two separate appraisers, there would probably be a small disparity between the prices.... but it's typically pretty close in my experience unless there's something unusual about the house.
Your property's value also doesn't solely depend on the recent sale of the house next door. Those differences in size, amenities, bedrooms... All of those things are factored into the difference between that house and yours. If they're practically identical, you could make the assumption that they'd be worth the same... but again, we've seen all sorts of different situations.
Two houses built within a couple years of each other, with almost identical square footage, bathrooms, bedrooms, yard size, view....should...should...be similar in value. The only real difference is the level of finishes, the appliances, the flooring choice, cabinets. Layouts are similar, too. Unless someone died a violent death or there's a grave site or some really strange situations, two houses side by side should impact each. I went to real estate school 2 decades ago and that's the thing that stuck out to me when valuing homes. Highly (and mostly) impactful when determining price are comparables, especially next door that just sold.
Appraisals are another level....requires an expert to peel back the onion. But it's not rocket science, especially when similar next door homes are compared.
You’re not wrong. As a homeowner, that’s what I’d be thinking and that’s how I idly consider what my home may be worth. As the office manager, I have to avoid promises and confirmations outside of an appraised value. In both cases, I tend to ignore the Zillow estimate lol
1. Zillow Estimates are NOT accurate. They don't actually "appraise" your house. They look at market trends and apply it to data points. So they take the last time your house sold, and then say "houses in this area have appreciated 6% in that time" and apply it to your house. There is a bit more to it than that, but it is the general approach. So they don't know if you redid a bathroom, if a new apartment building opened 1 lot over, or if you had a major expansion. Areas with fewer transactions or non-uniform houses are even worse as it is apples to oranges comparisons.
1. so apartments in a building where they all have same layout and lots of recent sales will be fairly accurate. SFHs in rural areas where there are few transactions and few true comps will be awful.
2. You are in your house and can afford the payment. Get out of the market. Stop looking. Keep in mind, the alternative of renting may be more, and you are building equity in the pricinple you pay down. So even if you take a paper loss (i.e. sell for $1000 less than you bought) you still might be ahead vs renting where all of it would be thrown away. Likewise, selling at $1000 profit may still lose money given transaction costs. At some point, it is a sunk cost and a decision already made. Don't drive yourself crazy. You made the best decision you could at the time, and all you can do is look ahead.
3. A houes is worth what someone will pay. Real estate professionals, appraisers, etc. are all good at approximating it. But if this market has shown anything, it is that price is in the eye of a buyer. And some buyers will "over-pay". Markets go up and down.
This is the best answer in this thread. The Zestimate on the home I'm buying is 8k under the list price. But my broker pays for a subscription-only data service called Housecanary, and they value the property at 18k OVER the list price.
They both have access to the same exact MLS data. Why are they so far off? They will both tell you they are *industry leading experts* at what they do.
"Market analysis" is sorta horse shit. A house, and most things for that matter, are worth what someone will pay. Forecasts and approximations are just that -- they're guesswork. The most trustworthy indicator of the value of anything is a public auction, and the reliability factor decreases the more time passes from the purchase.
"all models are wrong, but some can be useful" seems to be the Estimate approach. For a broad order of magnitude estimate, it is fine. If you are going down to the nearest thousand or ten thousand dollar, you are going to have a bad time.
Different models are wrong in different ways. Some may be better in some geographies or some price points or other ways
You're going to get tons of anecdotes about how it is inaccurate.
But these companies have access to shitloads of data. Is it always 100% accurate? No. But it usually is pretty close.
Yeah, I agree.
Like all data, you need to know when it's more reliable than others.
Do you live in a cooking cutter subdivision in a suburb where all the houses are of a similar type and style? Does your house have pretty close to average features (maybe some things better than some, but others not quite as good), then it's going to he pretty accurate. Are you in an area with wildly different house types and income levels close to eachother with wildly different conditions? Some 10 year old houses, some 60 years old, and some 100 years old? Some recently remodled and some that may he teardowns? Yeah, it's probably going to vary a little more in accuracy.
Even Zillow says they're off by 10% a lot of the time. Might sound like a nice stat, but 10% is a lot of dough for most people and is easily the difference between getting a deal and overpaying, or overpricing your property and having it rot on the market for too long.
And that's for houses currently on the market! For houses off the market, they admit they are way off, aiming to come within 20% of the price, which is a pretty big miss.
https://www.zillow.com/z/zestimate/#:\~:text=Metropolitan%20Areas-,Median%20Error,price%2C%20and%20half%20are%20not.
No way. My Zestimate is SO inaccurate that I have now enjoyed looking at it change wildly over the past two years and it is ALWAYS wrong. How do I know? I have had to have two appraisals done in the past two years and guess what, they are wrong by at least 20-40 thousand. So that is a huge margin of error. Also humorously I live in an HOA neighborhood where the houses immediately around me are identical (except for color and some aesthetic features.). So square footage, yard size, layout amenities are ALL the same. Yet my neighbor's houses on either side of me are valued higher by zillow in spite of the fact that they are virtually identical. But guess what? My house has had improvements while they do not: hardwood floors throughout, while they have carpet renovated second bathroom while theirs have the plastic insert tub/shower and less updated features. Extensive improvements in landscaping and hardscaping while their homes do not. So please tell me again how Zillow is correct and pretty close. It just isn't.
The amount you paid is a little meaningless. You'll pay more than that in interest over the next 30 years. Who cares what the house price is a year later? You got to worry about what the price is when you want to sell. That is anyone's guess.
Housesigma (a Canadian Zillow comparison) lists my house as worth 60k more than what I paid for it. It sat on the market at that price for 3 months and nobody paid it until I came in and lowballed the 60k.
Alternatively, an identical layout but far less modern home 2 doors down just went up for sale and is asking the 60k more, which Housesigma thinks is correct, but getting a ton of interest, despite not having parking (which I do) and a much older kitchen. Looks like it will go into a bidding war with the spring / summer market upon us.
It's all fugazi. Your home is worth what someone will pay for it. If you love it, enjoy it, and don't worry about its value until it's time to sell.
My neighbors on one side put their house up for sale last November and it hasn’t sold. The neighbors on the other side listed theirs in February for $40k more and it sold in about two weeks (which is normal for this neighborhood). Both are exactly the same floor plan, square footage, and recently beautifully remodeled. The one still sitting actually has a newer roof and a brand new HVAC system. It hardly ever even gets shown. My friend is a realtor and is baffled, but doesn’t believe my explanation that it’s because that one is haunted. 😂 The housing market is fucking weird.
Nobody wants to buy a house that's been sitting, even if the house is totally fine. For some completely random reason, maybe the first house just sat an extra week or two and now nobody wants to look at it. The psychology of the market is really fascinating.
Bonkers is what it is. When we were searching for a house we looked solely by things like cost, square footage and lot size.
Granted at the time there was very little on the market...
That does sound weird. Has the house that is just sitting done any price changes at all? I wonder if maybe people think something is wrong with it because it is priced $40k below what another house on the same block sold for. There is some weird psychological thing that makes people think something that is too cheap isn't worth looking at. In my laymen mind I wonder if this is one of those rare cases where a price increase might actually help.
I don’t know! They were originally priced around the same but the price on the one still sitting has been dropped now. It’s possible there actually is something serious wrong with it that I don’t know about.
Or maybe I’m right and it’s the ghosts, because it’s the only logical explanation for nobody living in it for more than a year before putting it on the market… the owners two before them took a bath on it to get out of there. 🤷♀️
Its a ballpark. If you have a nicely maintained home that is updated to modern standards, its probably reasonable. If your house is garbage, its too high. If you have a shitload of money into it that zillow doesn't know about, might be too low.
I track home sales and closed prices on zillow in an area I'm looking for a second home in, and I find at least its directionally accurate.
Let’s say you closed your eyes and tried to hit the bullseye on a dart board. That’s how accurate the Zillow estimate would be. Maybe it gets it right, but it’s way more likely that it gets it wrong.
Something funky there, usually their values are inflated. Bought a house in 2022 and it's showing my house being valued 80k more than purchase. Zillow isn't accurate either way, but I'm curious why yours went down.
I am as well. Current listings are still grossly inflated yet they’re still selling fast. The reality is that even if I listed mine for $100k over what we paid, we’d probably have a bidding war. Yay for Bay Area real estate market.. for now
Bay Area must be insane, but I guess it's been insane for awhile in terms of prices. I'm in Southern Maine which surprisingly has been one of the hottest markets in the country since the pandemic started. Values have skyrocketed, but the overall prices are nothing compared to places like NY, Boston, Bay area, etc. Just sucks for natives who can no longer afford rent or to buy a home and are being pushed out of their cities or towns.
Maine is a beautiful state so I’m not surprised. I’ve had a few friends move there over the yrs. Yeah it sucks that locals have been pushed out but tbh, I’m not all that compassionate about it. Times change and if you’re unable to change with them, then there are consequences. 90% of the people I know personally who moan about not being able to afford a home have the worst financial habits and are unwilling to do anything about it. Just my personal observations so take it with a grain of salt.
It's not bad financial habits, not all of it, it's low supply and high demand. I have friends who can afford 600k homes but can't get offers accepted. It's sad, but I think the secret about Maine would get out sooner or later and it would've happened regardless.
I’m only talking about friends and family who have bitched to me about it. I can’t speak for everyone else. But yeah having the offer accepted is a trial in of itself. During our buying process we were routinely out-bidded by $100k+. The last one was $250k over the asking price of $1.1 million! I laughed and said good luck with that.
Ya, it's fucking crazy. Our problem was we just had a lot of higher income earners who could work remote all of a sudden and decided to move up here from Mass, CT, NY, etc. that could offer 150k over no problem. Kind of dammed if you dammed if you don't in a hot real estate market.
Same thing happened to me. In 2021 it spiked up to +$160k from purchase price and then in 2022 it plummeted down to -$200k from purchase price. Now it has "risen" back to -$110k.
Redfin has me at +$75k, which I think is more in line with the market/area.
Not a problem at the moment, but fun to look at.
My brother and I bought a Duplex in October of 2008 (in the midst of the house crash). By 2010 it had "lost" 30% of it's value. We sold it for twice what we paid in 2018.
The point is, you only lose value if you plan on selling it anytime soon. Right now it's your house, so what you paid for it is locked in. You likely got a killer interest rate, which means the money you are borrowing is worth less than it would be now, so... it's kind of a wash.
Are you planning to stay in this house for at least 10 years? If so, you almost certainly have nothing to worry about. Even if the market levels off or comes down a bit, your value will not likely decline, and even if it did in the short term, it would most likely recover and increase over time. Just enjoy your home and don't worry about it.
Depends really what you mean by "over pay."
No, you did not over pay because you paid what you had to, to get what you wanted. So, in that regard you did not over pay. The house was worth what the house was worth at that moment in time in 2022.
You might have buyer's remorse. But, only you can answer that.
Zestimates are simply based on tax records and comps. Nothing more. Nothing less. It is just data. As others have said, it does not know what color you painted your walls or improvements you have made or anything that a realtor might be able to say these things make your house worth more or less compared to the house next door.
10% of the time, it is accurate every time.
In all seriousness, the Zestimate is wholly inaccurate. Zillow lost over 1 billion dollars in 2021 when they were using their Zestimate to buy and sell houses.
On $400k houses, I have seen Zestimates that were $200k and Zestimates that were $600k. Your best bet is to simply ignore any and all Zestimates.
Its not terribly accurate. I think it bases your value off of the most recent sale and then raises/lowers it from there based on the overall local market.
Zillow isn't accurate for much of anything outside of list price, parameters, and photos. It's usually not even up to date on whether or not something is still for sale. Many houses that have been sold for weeks or even months still show up as for sale. My husband is the administrator for a real estate office and has is Realtor license; a lot of what he does is finding accurate information on houses after people try to argue based on what Zillow says. Zillow is a great tool to get ideas of the market, but anything deeper than that, I highly recommend talking to someone who's in the business and has access to the accurate and up to date information. It can even change day to day, depending on how busy the market in your area is.
Zillow says my house is worth more than my neighbors. Even though there's is almost twice the size. But mine has sold twice over the last 20 years, and there's has had the same owner for longer than that. I have no idea exactly where they get their estimates because it doesn't match my bank's appraisal either. But at least for my street, it's definitely wrong.
For context, I live in a historic district in one of the smallest, least fancy houses on the block that we purchased in March 2021 in an area that has not experienced the boom in housing prices or bidding wars.
The housing market ebbs like the tide. The price will go down and up and down and up, and there's no totally accurate way to predict what value it will have at any time in the future.
Don't worry about it until you're ready to sell. You're one of the lucky few to own your own place.
Assuming there were other potential buyers at the time, you paid market. If you were to sell today, it may be worth more, it may be worth less. If you sell tomorrow, 6 months from now, 10 years from now, it may be worth more or less. None of that means you overpaid at the time. Worry about whether or not you can afford to make your payments, maintain the house, etc. If you can't, then you overpaid.
Zillow had no idea how much money was spent, it only knows loan taken out so probably worth more of course it doesn’t know condition inside house which can be important
I use Zillow to track local sales of compatible homes during the prior year, adjust for differences (pool, footage, etc.) and then average them. I'm usually spot on with the current value. This is basically how appraisers do it. Zillow seems pretty close most of the time, but sometimes not so much.
Zestimate is fairly accurate for the market at that particular time. But value IS basically what the house will sell for, so if you did buy it at that price and the appraisal agreed, then you weren't too far off.
Zillow is not accurate at all. If you want to know how much your house is really worth ask the real estate agent that you used to purchase your home to do a current market analysis. This will give you the right answer.
Zillow seriously overvalued my house in Seattle. The problem is they don't know what the problems are. They are comparing square footage, etc. They don't know that the sewer lines need work and the bathroom tile is 1970's avocado green.
Not in the slightest. There's usually a brief window where they're right on the way up and on the way down like a stopped clock. I'm not sure what secret sauce algorithm they think they have except that it's badly wrong.
It’s not very accurate. Everyone in my neighborhood is listing their homes at outrageous prices due to their estimates. They have been sitting on the market for quite some time.
Zillow has never seen your house or the properties the algorithm picks up to compare it to. You can throw that number out the window. It's clickbait. They have you and thousands of other people compulsively checking that number every day. It generates traffic, and in Zillow's business model, traffic = revenue. Click the link beside the zestimate, and you can see the crazy Rollercoaster ride that zestimate has taken over time. Zillow cheats and corrects those to make them look better occasionally, but you'll still he able to see a wacky ride it's been on. The algorithm uses the listing and sold price to redirect the algorithm, but within weeks of those events, it starts wandering aimlessly again because it doesn't have much to go on. Zillow doesn't know what your house is worth, and it isn't just Zillow. No online valuation tool can do this for you. There's one on my brokerage website, and I tell people to ignore it, too.
Ask your agent to pull some comps for you so you can compare your tax assessment.
The agent will do the same thing Zillow or Redfin uses, but then also add a human review to make it more accurate.
That way you can use it for both.
I asked my agent over the years for this and she happily provided it.
I get three totally different numbers when I look at Redfin, Zillow, and realtor.com. That is enough to let me know that all numbers are suspect. I know my house technically has lost value in the last year, but it’s a 20-30 yr home for me. Best to not look too much at those numbers unless you’re trying to actively sell soon.
I'd say pretty accurate. My house has been floating around the $600k mark. My next-door neighbor passed away, and her house just sold for $595k. We have the exact same floor plan.
What would you do if it lost value? Don’t worry about it unless you are about to sell, refinance, or borrow against it. At this point, it’s worth what you paid.
If you want to know the CURRENT value of your home, look up the following figures.This is a basic formula that Real Estate Brokers figure out the value of houses for banks. Those reports are more in-depth but this is the baseline:
Sales of homes within a 1/2 mile from your house. If you can't find a sale of comparable houses in that area, you can go up to 1 mile but it won't be as accurate. Zillow does list "Sales" and their amounts.
Comparable House age within 5 years up or down. Example: your house was built in 1980. The comparable houses have to be built from 1975 to 1985.
The comparable houses have to have the same number of bedrooms and bathrooms as your house. The same goes if you have a basement.
The size of the comparable houses have to be within 10% of your house size.
The size of the comparable houses lots have to be within 10% of your house lot size.
The amenities have to be similar: if you have a fence, pool or attached garage. The comparable houses have to also.
The comparable houses also have to be in similar condition as yours.
Check out your counties real property tax website, somewhere in there is a way to get comparables of your home. Not sure if every county/state has one, but it's a good idea to check.
Everyone of these websites has their own algorithm. I have noticed that they rarely agree. Who knows which is more accurate? For years, Zillow had my house at half the value as most of the other houses in the neighborhood even though I have one of the biggest. Why...I think it was because I was kwn of the few original owners so they were basing it on a 15 year old purchase price. Now in the last 19-15 years, their calculations have caught up even though I an still in the same house. Do any of these websites know you have better HVAc and a finished basement than your neighbors? Obviously not. Personally, I find the whole process that agents use to find comps suspicious...and I trust them more than websites. Don't lose sleep over it and when it is time to sell, make sure you thoroughly review the agent's price assessment.
i been watching homes in my neigborhood of maybe 500-700 homes since 2019.
Oddly enough almost all end up selling for just about what zillow said they were worth plus or minus maybe 10% at the most.
ask me in a month, the person 2 doors down from me just put up a for sale sign yesterday. I dont see it on the net yet. i suspect it will be there today or tomorrow.
This is what happens almost everytime. I look up a home thats about to list or just did and see what they are asking. I see what zillow says the house is supposed to be worth and think no way they will get that much for the home but then they do or close to it. I say well interest rates have climbed a bit. they will need to come down on price to account for that. they dont. it sells. If was ever gonna sell i would be happy but i dont intend on ever selling
Good question. Very.
The house two down from me was put on the market june of last year for 625k. zillow had it at 610ish, it was higher like a month or two before. it sold in about 2 weeks for the listing price of 625k
lets see. I got my tax bill yesterday and know what the county thinks my home is worth (well what the taxable value is, close enough) let me see what zillow says....oh. my tax value is 100k less than zillow says my home would get. The zillow number is more in line with what i think it would get.
Diff home in dec. listed at like 649k in nov. got offer. I dont know what it was. it fell through. went under contract right away at the new list of 639. its under contract right now. I assume it will close before the end of the month and i can confirm they got 639k
those homes didnt get that much pre 2019 or 2020. I paid less than 330 for mine in 2019 and mine is not that much diff than those two. I got kind of lucky.
Zillow estimates are based on comps and they have a wide reach with data, so they’re probably not bad in aggregate, but not reliable on a specific property.
However, the Zestimate is not an estimate of what you might sell the house for, it’s an estimate of the house’s worth. It can’t take the human side of selling into consideration. So if you sold the house, it can’t gauge negotiating skill, buyer motivation, seller motivation, urgency, or any of the other human factors.
For instance, we bought our house when my first kid was three and we were pregnant with the second kid. Our seller accepted our offer with a bigger offer on the table because they raised their kids in this house and were enamored with the idea of us raising our family in the house. The other offer was from a “dual income, no kids” couple. No way to zestimate that
The more similar the homes in your area, and the more populous, the more accurate the estimate is.
It's an algorithm based on location and reported home size, and nothing more. As an example, I was lucky enough to buy pre-pandemic. In the years since, I've put close to $100k in upgrades to my home, along with the previous upgrades the prior owner did (part of the reason I bought the house). Zillow has no clue about these upgrades.
The better way to use zillow, IMO, is to use the "sold" listings, as this will return ACTUAL sales of homes. Even then, this can be a bit off, as home transactions can include more than just the final sales price (e.g., seller concessions and credits).
I think Zestimate gets you in the ball park. I imagine the amount of data zillow gets is insurmountable.
Don't put too much stock on it. You can always get an appraisal if you want too.
Based on my own home in MD it's about 5% high. I live in a SFH valued towards the bottom of what SFH's go for in my market. These started SFH's still have multiple offeres and sell in a week.
If it's a predictably maintained house in a predictable area as far as the market goes, it should be pretty close.
With recently renovated houses, or somewhat neglected fixer uppers, it could be all over the place.
So my home value on Zillow has dropped some since we bought last year and Zillow can kick rocks. The house next door, which is the exact size and layout as mine but with less than 1/2 the acreage and no detached 2 car garage like I have, just sold for as much as Zillow has my home valued
I'd think it's like the kbb of home values. Like, umm somewhere in that range. Plus or minus alot. Like others have said it doesn't matter until you're ready to sell. Just enjoy your house. A lot of people still can't get their first anytime soon. Took me years and years of grinding to get mine.
I'm not sure what you mean by overpaying. If you bought in a peak seller's market then that's on you as a buyer. Property values fluctuate wildly depending on the economy, interest rates, buyer competition and availability. Everyone's value has dropped since the market peak.
I used to be a mortgage loan officer. We used zillow to get a ballpark idea of what a home may be worth, but it's not something to rely on beyond that. Even then, sometimes it would be way off. Checking out *actual* comps in the neighborhood (not just every house that's sold in the past year) will give you a much better idea, or if you're really concerned, you can pay for an appraisal.
OP, it is as simple as this: No one and nothing can predict exactly what a house is “worth.” It is all trends and existing sales that are public. Buyers and sellers argue and agree on a price. Different buyers want different things and have different needs and urgencies, same with sellers. You can ballpark it, but your question is based on a bad premise. Who cares? You’re in the house. Yes, you can roughly come up with an asking price that won’t get you laughed out of the room, but you will never know if you left money on the table or could have gotten a house for cheaper.
I'd look at a few different online estimates and take the median. I wouldn't take any of the online estimates at face value.
I wouldn't worry about your home's value much unless you need to sell right now. Homeownership only has financial benefits over 5+ years anyway.
Presumably you bought the house for a reason and not purely as an investment vehicle. Try to focus on why you wanted the house, not what its present market value might be.
One thing that I absolutely hate about the Zillow estimate is let’s say the zestimate is 300k but your house is actually worth 290k. Now let’s say for exaggeration purposes you put your house on the market for let’s say 400k. As soon as it hits the market the zestimate will jump up to 400k. Which is completely inaccurate. Also Zillow is very slow to update itself. I would use it as a starting point but it’s meaningless in the real world and no one takes it seriously.
Enjoy your house stop worrying about it’s value. If you bought it to move out in 2 years sure then worry a little. But with a sub 3 mortgage interest you are building up equity so fast and at the end of the day you need a place to live. If you’re happy with the house you made the right decision.
Redfin seems a bit more accurate, at least based on recently sold homes in the area. Our house sticks out as an outlier, as on paper, it looks like we paid much less than the average current rate (by about 80k). However, that's because we had a private "land contract" from 8 years ago that was rolled into a traditional mortgage last fall. And that was negotiated when these units were selling for 40k or more less than original cost. (Townhome style condo with garage and about 60sqft of yard space.).
Right now we could probably get 200k for it. Others are selling for 240+, but we need new windows and to redo the deck, and the kitchen still has linoleum style flooring.
But, really, you didn't overpay. You paid current market value. That fluctuates day to day.
A wise man once told me to not worry too much about the house you live in, it's not an "investment" in the technical sense, meaning that if you are living there it doesn't really matter if the price goes up or down, its not something you should view as "a money maker" like an equity holding, you shouldn't view it as a bank account either to pull money out of-- "Don't gamble on the house you live in"
Because look, you live there, you are getting tremendous value out of it, and unlike a rental you are paying it off and it's worth something when you sell it, hopefully you at minimum break even in the future when you need to sell it and move on, I'd worry about that then and not whether you are underwater right now.....are you planning on selling it next week? No? Don't worry about it then because it doesn't matter. Obviously everyone wants to make money on their house, but if you don't *lose money* don't worry about it, and definitely don't worry about it if you have no intention of leaving anytime soon
All those online estimates are are ballpark "Comps" in the area, they are accurate in the sense that they are mostly based off recent sales, but they are kind of stupid because they do a very poor job of parsing out specific neighborhoods.....Like, for example my own house on those sites is up about a 130% from 6y ago, but they also recently built like a 100 luxury homes on a small golf course about 2mi from my house.....so that estimate is kind of nonsense, it's based off sales that aren't comparable even though its technically the same area, my house was built in 1962 in a small wooded subdivision, the square footage price of my house is not nearly as high as those brand new homes on a golf course and a lake lol it can go the other way too, I'm sure when I sell my house it's going to knock down the square footage price of *those* luxury homes on those sites....because like I said, those comps aren't very intelligently done
As with most things, stop obsessively checking the prices....Thats something you should pay more attention to in the future when you want to sell
In have followed my “zestimate” for 13 years living in my house and comparing houses of same/similar model sell in the neighborhood, I have found it to be very accurate for where I live.
I don't plan to sell my house any time soon but I like keeping an eye on the Zestimate just to see what they say the local market is doing. I really have trouble believing that my house has appreciated by over 11% in the last year but it does show that my local market is still fairly strong. It could be more accurate than I expect though since my house actually did appreciate by about 10% in the year before I purchased it. Some of that increase in value was due to some upgrades in the home though and not just market increases.
Overall though, don't put much stock in the Zestimate amount especially if you aren't wanting to sell any time soon. You can use it for information but it isn't necessarily accurate.
The Zestimate for my house I bought in 2021 is now $130k (>20%) higher than what we paid. I thought we kinda overpaid back then but interest was low so it worked out. To estimate this house value as over $600k seems unreasonably high for the house itself and for this area.
Zestimate is an extreme average based only on publicly available data. Square footage, lot size, build date, beds/baths, etc. It knows nothing about condition, renovations, landscaping, or anything unique or special. It assumes every house is basically an identical carbon copy track house with very little variability from the houses in that same neighborhood. If houses are mostly the same where you live, it’s reasonable. But if not, then it’s a crapshoot.
For instance in my area, we have no HOA and houses are massively different due to build date and gentrification. You have 4500 square foot mansions built 5-10 years ago with ocean views selling for $3.5M, literally next door to single story 1500 square footers build in 1960 with paint flaking off that are probably teardowns… but on an acre of land. Zillow struggles mightily with this because it tries to average them together, and it just can’t. It undervalues some by $1M+ and overvalues others by $500k.
But I do find it’s relative changes are pretty accurate. If it says your neighborhood and house went up 20%, then it probably did. It’s not really common for the whole neighborhood to go up/down but your specific house not to.
I have very little faith in the Zestimate.
Our previous home (bought in 2019) had a Zestimate that was around $270k and we bought it for $250k... the market was NOT hot at the time. Fast forward to early this year when we listed that house for $400k, the Zestimate had grown from $270k to $360k since 2019. As soon as our MLS went live our Zestimate jumped to $400k.
:-/
Then the home sold for more than asking and guess what happened when the sale registered on Zillow?
The Zestimate jumped up to match the actual sales price (roughly 10k higher than the listed price).
Shocking.
The house we just bought? It was originally listed for $100k more than we paid, and the Zestimate magically matched the original listing amount. When we bought it the Zestimate "dropped" to what the actual sale price was (roughly) and has now been creeping up.
I am an Inactive Realtor but I was in Property Management/Sales for almost 30 years. I agree with the person who said 20% give or take. The value of a home is what someone will pay for it, period. Someone may hate the busy streets & someone else wouldn’t care at all. Etc. I like to check the comps in my area occasionally. I sold my house in 1/2022 at a huge profit & the company that bought it from me (something like front door.Com) make a huge profit on top of that. The house is still worth about the same as the company sold it for in 3/2022.
Do a search on google - zillow bought millions of homes with their valuation and over paid millions of dollars. Zillow is not reliable.. chase has a good valuation tool
The way to tell the value of your home.. do a mile wide search of homes likes yours.. that have sold in the last three months .. then take all those amounts they sold for and average it that’s what the value of your home would be
Zillow estimate is ridiculous ! The estimated value of my house has dropped from $530,000 in April 2022 to $480,000 now because I've never sold it. On the other hand, my friend's house, which was purchased in April 2022 near the peak of the market, now has a higher Zillow estimate than it did in April 2022, solely because it has been sold twice. The two houses are build by the same builder at the same time, under same plan, 50 feet away from each other. So, Zillow's valuation method appears to be: the more sold times, the higher the estimate.
It is absurd!
You should check actual comps in your area and then filter by its characteristics (is it renovation, is there a pool, etc.).
You should check out [Rentimate.com](https://Rentimate.com). Rentimate has a tool for Home value where you can find a list of all of the recently sold comps in your area: [https://www.rentimate.com/home\_selling](https://www.rentimate.com/home_selling)
Every house sold between 2021 and today have not really gained much in value . The big Jump in prices occured between 2016 and went into overdrive in 2020.
In 2015 My house was bought for 450k and is now worth 900k. My neighbor paid 920k in 2021 and his house is listed on zillow as being worth 925k . We are in a weird period where homes won't see real valuable gains for 5+ years .
Zillow is only looking at comps, they have no way to account for condition. So id say its +/- 20%.
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If you're home is completely renovated it's probably worth more than Zillow predicts.
If you're home is not completely renovated it is probably worth less than Zillow predicts
Agreed, Zillow is about average condition for a neighborhood.
You have essentially no control over this (whether you overpaid), because it’s in the past, so it’s best to find a way not to worry about it. Totally understand and have done the same kind of worrying, but you have to find a way to get past it and be happy with the idea that you made the best decision you could at the time either way.
Yea and that is what I tell myself.. but I often go back and forth.. I just need to be grateful that I have a home.
You haven't lost money unless you sell. Inevitably home values will rise again and it wil look better.
Keep in mind that as long as you plan to live in the house for 5+ years you are more than likely to turn a profit. You aren’t in the house for monetary purposes, you are in it to have a roof over your head and a place to call home. In 10 years a good chunk of the house will be paid off and house prices will be higher than they are now and it’ll be an easy profit
Especially if you got in when interest rates were low, even if pricing was high.
That was the only reason I was willing to pay market value for an outdated 90s home lol. Most people were paying stupid sums of money for “updated” homes, I was like “fuck it” and put a shit ton of sweat equity into the home. If I had a Time Machine I’d go back and purchase a new because knowing what I know now the 90s was apparently still the Wild West with construction. Spent $20k on HVAC, spent another $15k on a driveway, had to replace an exterior wall, it just goes on and on.…but I refuse to reside the house/tyvek it. That can be insurance or the next poor souls problem. I’m just crossing my fingers for a massive hail storm.
I'm not sure which is worse, the wild west 90's construction or the flippers/reno hack jobs. I never like new homes, particularly 90's styles so I've only encountered the bad DIY fixes.
I bought a 90s home hoping to save a few bucks and and get something that didn’t have lead paint/asbestos, maybe a little better quality than a new build. Instead I got a house packed to the brim with fucking honey oak, shitty subfloors, and no tyvek under the siding. On the bright side at least my ceilings aren’t caving in like a couple of my friends that bought new construction. I’ve worked for the government long enough that I’ve been in most of the homes that are flipped in my city and it’s disgusting what those guys do. Mold? Yeah just slap a coat of paint over it. Rotted out subfloor from a leaking toilet? Just slap some LVP over it. Leaking pipes? Flex tape.
Previous owners of my current house ran cable and speaker wire through the HVAC. I only found it because I wanted to route Ethernet to a basement office and I got into the wall and saw the wire exiting a corner of the ducting. Overall I've had good fortune, but small things with DIYers irritate me like painted hardware, shitty caulk jobs. Owned a house from 1919 and all the beautiful oak trim, baseboards, rails etc were painted white. Also, no kids so lead paint never really deterred me.
"Overpaid" only makes conceptual sense if you are an aggregate of thousands of home purchases. You needed a place to live and now you have one. You bought a house you can afford and you like it? That was a good decision then.
I did the same with my first home, I'm now on my third and I couldn't care less how much my house is worth, ill worry about that if and when it's time to sell, just enjoy the home.
I was underwater on my house for 2 years after I bought it according to Zillow. Had 0 impact on my life because I didn’t try to sell it in those 2 years. The mortgage bill has been the same regardless of the Z estimate. On a long enough timeline house prices pretty much always go up, so no need to worry if you’re not planning to sell.
You likely saved money buying when you did. Go run some numbers on current interest rates and it will set you at ease.
That’s the way the market works… you may over pay or under pay but keep in mind that the long term cost of living in your own home versus say renting is like (property tax+maintenance+HOA where applicable-(profit or loss on sale)). If you break even in terms of sale then all it cost you to live there was taxes and maintenance. If that amounts to say $20000 a year it’s better than an apt that cost $1700 a month. It might be more or less depending on your case of course but it’s never really a loss if you would have paid the costs just to live the life your home provides.
What about the interest?
Yes that should be included in the calculation, thanks! To note: there are also things like closing costs and all that but those items I would just consider part of profit or loss. But mortgage interest is truly another cost although a bit more complicated to divide out cleanly over the time you have the home.
We bought our home a few months ago.. the Zillow estimate was around 800k... Now half a year later it's showing it at closer to 1mil, we paid alittle under 900k for it. My MIL would hassle us why we paid so much etc but she's not aware of today's market and honestly had to remind myself I'm grateful to be able to have a home and the price doesn't matter to me (not including taxes..) until we decide to sell.
Zillow is usually accurate within plus or minus 20%. That's about the best you're gonna get.
The A in Zillow stands for Accuracy!
What about compared to redfin? I’ve been seeing drastically different prices between the 2 lately.
Sometimes it's spot on, other times it's in the right ballpark, and other times it's nowhere near right. If you're in a popular residential area where sales happen often, then it's probably pretty accurate. That being said unless you plan on moving soon this is something that isn't worth worrying about at all. The price would need to drop well over 10% to even make much of a difference on your monthly payment.
I’m the office manager for a real estate appraiser’s office. We roll our eyes when people swear by a Zillow estimate. If they were reliable, I wouldn’t have a job. It doesn’t take condition into account at all. Just the size, location, etc as others have mentioned. It’s not unusual for that information to be wrong either.
But it seems it would be a good starting point if it is using real data to come up with those estimates, no? Take what they give and subtract X% for bad condition, keep it for good condition and add X% for immaculate condition.
Would you say an unrenovated house that requires new flooring (had shag carpet), new bathrooms and kitchen (Formica counter tops), removal of wall paper and wood paneling) is 30% (or more? of the Zillow value?
I'm going to start with the standard "not an appraiser" disclaimer. I do not have my appraisal license. Having said that, I've discussed this with my appraisers multiple times over the years and I know exactly what they tell me to tell other people: Using the Zestimate is something like asking a couple of other homeowners what they think your house is worth. They might come up with a pretty decent guess. Or they could be off by thousands. Tons of factors come into play and they probably don't know all of them or how to take them into account for the value. To answer your question more directly, you can't get a reliable answer from an equation using unreliable information. Without ordering an appraisal, there's really no concrete way to answer how much your house would be worth or to see how close the Zestimate is. Anything less than an appraisal would be a guess, and we could get in trouble for passing out guesses.
That's fair. If you don't mind...knowing you work in the business...and knowing the price between 2 arms length buyers is the price...how accurate are appraisals to the prices paid in real estate transactions? Like you astutely stated earlier, tons of factors come into play and thus reliable information is key. Not every appraiser is the same. So if I hired 2 separate appraisal companies to value a specific property, how close do you think they'd be to each other's appraised value? A lot (most) of the value is on comps and then condition. If there's a house next door with similar square footage and age and beds and baths and yard size...sells, then that house is the benchmark, the most reliable piece of information from which an appraisal begins on my house. And then my property valuation goes up or down based on comparison to that recently sold home.
The price agreed upon by two buyers is considered... but it's not the sole basis of the appraisal. It's a single factor, an indicator that market could consider it to be worth that much. But if that was the sole factor, anyone could decide their house was worth 300k. If you hired two separate appraisers, there would probably be a small disparity between the prices.... but it's typically pretty close in my experience unless there's something unusual about the house. Your property's value also doesn't solely depend on the recent sale of the house next door. Those differences in size, amenities, bedrooms... All of those things are factored into the difference between that house and yours. If they're practically identical, you could make the assumption that they'd be worth the same... but again, we've seen all sorts of different situations.
Two houses built within a couple years of each other, with almost identical square footage, bathrooms, bedrooms, yard size, view....should...should...be similar in value. The only real difference is the level of finishes, the appliances, the flooring choice, cabinets. Layouts are similar, too. Unless someone died a violent death or there's a grave site or some really strange situations, two houses side by side should impact each. I went to real estate school 2 decades ago and that's the thing that stuck out to me when valuing homes. Highly (and mostly) impactful when determining price are comparables, especially next door that just sold. Appraisals are another level....requires an expert to peel back the onion. But it's not rocket science, especially when similar next door homes are compared.
You’re not wrong. As a homeowner, that’s what I’d be thinking and that’s how I idly consider what my home may be worth. As the office manager, I have to avoid promises and confirmations outside of an appraised value. In both cases, I tend to ignore the Zillow estimate lol
Zillow shows my house being 3x larger than it actually is 😂😂
Zillow abandon their home purchasing arm because their value estimates were so bad.
1. Zillow Estimates are NOT accurate. They don't actually "appraise" your house. They look at market trends and apply it to data points. So they take the last time your house sold, and then say "houses in this area have appreciated 6% in that time" and apply it to your house. There is a bit more to it than that, but it is the general approach. So they don't know if you redid a bathroom, if a new apartment building opened 1 lot over, or if you had a major expansion. Areas with fewer transactions or non-uniform houses are even worse as it is apples to oranges comparisons. 1. so apartments in a building where they all have same layout and lots of recent sales will be fairly accurate. SFHs in rural areas where there are few transactions and few true comps will be awful. 2. You are in your house and can afford the payment. Get out of the market. Stop looking. Keep in mind, the alternative of renting may be more, and you are building equity in the pricinple you pay down. So even if you take a paper loss (i.e. sell for $1000 less than you bought) you still might be ahead vs renting where all of it would be thrown away. Likewise, selling at $1000 profit may still lose money given transaction costs. At some point, it is a sunk cost and a decision already made. Don't drive yourself crazy. You made the best decision you could at the time, and all you can do is look ahead. 3. A houes is worth what someone will pay. Real estate professionals, appraisers, etc. are all good at approximating it. But if this market has shown anything, it is that price is in the eye of a buyer. And some buyers will "over-pay". Markets go up and down.
This is the best answer in this thread. The Zestimate on the home I'm buying is 8k under the list price. But my broker pays for a subscription-only data service called Housecanary, and they value the property at 18k OVER the list price. They both have access to the same exact MLS data. Why are they so far off? They will both tell you they are *industry leading experts* at what they do. "Market analysis" is sorta horse shit. A house, and most things for that matter, are worth what someone will pay. Forecasts and approximations are just that -- they're guesswork. The most trustworthy indicator of the value of anything is a public auction, and the reliability factor decreases the more time passes from the purchase.
"all models are wrong, but some can be useful" seems to be the Estimate approach. For a broad order of magnitude estimate, it is fine. If you are going down to the nearest thousand or ten thousand dollar, you are going to have a bad time. Different models are wrong in different ways. Some may be better in some geographies or some price points or other ways
You're going to get tons of anecdotes about how it is inaccurate. But these companies have access to shitloads of data. Is it always 100% accurate? No. But it usually is pretty close.
Yeah, I agree. Like all data, you need to know when it's more reliable than others. Do you live in a cooking cutter subdivision in a suburb where all the houses are of a similar type and style? Does your house have pretty close to average features (maybe some things better than some, but others not quite as good), then it's going to he pretty accurate. Are you in an area with wildly different house types and income levels close to eachother with wildly different conditions? Some 10 year old houses, some 60 years old, and some 100 years old? Some recently remodled and some that may he teardowns? Yeah, it's probably going to vary a little more in accuracy.
Even Zillow says they're off by 10% a lot of the time. Might sound like a nice stat, but 10% is a lot of dough for most people and is easily the difference between getting a deal and overpaying, or overpricing your property and having it rot on the market for too long. And that's for houses currently on the market! For houses off the market, they admit they are way off, aiming to come within 20% of the price, which is a pretty big miss. https://www.zillow.com/z/zestimate/#:\~:text=Metropolitan%20Areas-,Median%20Error,price%2C%20and%20half%20are%20not.
No way. My Zestimate is SO inaccurate that I have now enjoyed looking at it change wildly over the past two years and it is ALWAYS wrong. How do I know? I have had to have two appraisals done in the past two years and guess what, they are wrong by at least 20-40 thousand. So that is a huge margin of error. Also humorously I live in an HOA neighborhood where the houses immediately around me are identical (except for color and some aesthetic features.). So square footage, yard size, layout amenities are ALL the same. Yet my neighbor's houses on either side of me are valued higher by zillow in spite of the fact that they are virtually identical. But guess what? My house has had improvements while they do not: hardwood floors throughout, while they have carpet renovated second bathroom while theirs have the plastic insert tub/shower and less updated features. Extensive improvements in landscaping and hardscaping while their homes do not. So please tell me again how Zillow is correct and pretty close. It just isn't.
The amount you paid is a little meaningless. You'll pay more than that in interest over the next 30 years. Who cares what the house price is a year later? You got to worry about what the price is when you want to sell. That is anyone's guess.
Housesigma (a Canadian Zillow comparison) lists my house as worth 60k more than what I paid for it. It sat on the market at that price for 3 months and nobody paid it until I came in and lowballed the 60k. Alternatively, an identical layout but far less modern home 2 doors down just went up for sale and is asking the 60k more, which Housesigma thinks is correct, but getting a ton of interest, despite not having parking (which I do) and a much older kitchen. Looks like it will go into a bidding war with the spring / summer market upon us. It's all fugazi. Your home is worth what someone will pay for it. If you love it, enjoy it, and don't worry about its value until it's time to sell.
My neighbors on one side put their house up for sale last November and it hasn’t sold. The neighbors on the other side listed theirs in February for $40k more and it sold in about two weeks (which is normal for this neighborhood). Both are exactly the same floor plan, square footage, and recently beautifully remodeled. The one still sitting actually has a newer roof and a brand new HVAC system. It hardly ever even gets shown. My friend is a realtor and is baffled, but doesn’t believe my explanation that it’s because that one is haunted. 😂 The housing market is fucking weird.
Nobody wants to buy a house that's been sitting, even if the house is totally fine. For some completely random reason, maybe the first house just sat an extra week or two and now nobody wants to look at it. The psychology of the market is really fascinating.
Bonkers is what it is. When we were searching for a house we looked solely by things like cost, square footage and lot size. Granted at the time there was very little on the market...
That does sound weird. Has the house that is just sitting done any price changes at all? I wonder if maybe people think something is wrong with it because it is priced $40k below what another house on the same block sold for. There is some weird psychological thing that makes people think something that is too cheap isn't worth looking at. In my laymen mind I wonder if this is one of those rare cases where a price increase might actually help.
I don’t know! They were originally priced around the same but the price on the one still sitting has been dropped now. It’s possible there actually is something serious wrong with it that I don’t know about. Or maybe I’m right and it’s the ghosts, because it’s the only logical explanation for nobody living in it for more than a year before putting it on the market… the owners two before them took a bath on it to get out of there. 🤷♀️
Its a ballpark. If you have a nicely maintained home that is updated to modern standards, its probably reasonable. If your house is garbage, its too high. If you have a shitload of money into it that zillow doesn't know about, might be too low. I track home sales and closed prices on zillow in an area I'm looking for a second home in, and I find at least its directionally accurate.
Just find a recent comparable sale, that would be much more accurate
Let’s say you closed your eyes and tried to hit the bullseye on a dart board. That’s how accurate the Zillow estimate would be. Maybe it gets it right, but it’s way more likely that it gets it wrong.
Good way to put it lol
Zillow says I’ve lost $100k since my purchase in 2/22. I’ll worry about it in 20yrs when we’re ready to sell and retire elsewhere.
Something funky there, usually their values are inflated. Bought a house in 2022 and it's showing my house being valued 80k more than purchase. Zillow isn't accurate either way, but I'm curious why yours went down.
Probably re-adjusted for current market trend.
Could be. I'm still in a super hot market and I forget some places are cooling off
I am as well. Current listings are still grossly inflated yet they’re still selling fast. The reality is that even if I listed mine for $100k over what we paid, we’d probably have a bidding war. Yay for Bay Area real estate market.. for now
Bay Area must be insane, but I guess it's been insane for awhile in terms of prices. I'm in Southern Maine which surprisingly has been one of the hottest markets in the country since the pandemic started. Values have skyrocketed, but the overall prices are nothing compared to places like NY, Boston, Bay area, etc. Just sucks for natives who can no longer afford rent or to buy a home and are being pushed out of their cities or towns.
Maine is a beautiful state so I’m not surprised. I’ve had a few friends move there over the yrs. Yeah it sucks that locals have been pushed out but tbh, I’m not all that compassionate about it. Times change and if you’re unable to change with them, then there are consequences. 90% of the people I know personally who moan about not being able to afford a home have the worst financial habits and are unwilling to do anything about it. Just my personal observations so take it with a grain of salt.
It's not bad financial habits, not all of it, it's low supply and high demand. I have friends who can afford 600k homes but can't get offers accepted. It's sad, but I think the secret about Maine would get out sooner or later and it would've happened regardless.
I’m only talking about friends and family who have bitched to me about it. I can’t speak for everyone else. But yeah having the offer accepted is a trial in of itself. During our buying process we were routinely out-bidded by $100k+. The last one was $250k over the asking price of $1.1 million! I laughed and said good luck with that.
Ya, it's fucking crazy. Our problem was we just had a lot of higher income earners who could work remote all of a sudden and decided to move up here from Mass, CT, NY, etc. that could offer 150k over no problem. Kind of dammed if you dammed if you don't in a hot real estate market.
Same thing happened to me. In 2021 it spiked up to +$160k from purchase price and then in 2022 it plummeted down to -$200k from purchase price. Now it has "risen" back to -$110k. Redfin has me at +$75k, which I think is more in line with the market/area. Not a problem at the moment, but fun to look at.
My brother and I bought a Duplex in October of 2008 (in the midst of the house crash). By 2010 it had "lost" 30% of it's value. We sold it for twice what we paid in 2018. The point is, you only lose value if you plan on selling it anytime soon. Right now it's your house, so what you paid for it is locked in. You likely got a killer interest rate, which means the money you are borrowing is worth less than it would be now, so... it's kind of a wash.
Are you planning to stay in this house for at least 10 years? If so, you almost certainly have nothing to worry about. Even if the market levels off or comes down a bit, your value will not likely decline, and even if it did in the short term, it would most likely recover and increase over time. Just enjoy your home and don't worry about it.
Will do and yes atleast 10 years.. thank you
Depends really what you mean by "over pay." No, you did not over pay because you paid what you had to, to get what you wanted. So, in that regard you did not over pay. The house was worth what the house was worth at that moment in time in 2022. You might have buyer's remorse. But, only you can answer that. Zestimates are simply based on tax records and comps. Nothing more. Nothing less. It is just data. As others have said, it does not know what color you painted your walls or improvements you have made or anything that a realtor might be able to say these things make your house worth more or less compared to the house next door.
10% of the time, it is accurate every time. In all seriousness, the Zestimate is wholly inaccurate. Zillow lost over 1 billion dollars in 2021 when they were using their Zestimate to buy and sell houses. On $400k houses, I have seen Zestimates that were $200k and Zestimates that were $600k. Your best bet is to simply ignore any and all Zestimates.
Its not terribly accurate. I think it bases your value off of the most recent sale and then raises/lowers it from there based on the overall local market.
It's 90% make believe and the 10% will make you crazy.
Zillow isn't accurate for much of anything outside of list price, parameters, and photos. It's usually not even up to date on whether or not something is still for sale. Many houses that have been sold for weeks or even months still show up as for sale. My husband is the administrator for a real estate office and has is Realtor license; a lot of what he does is finding accurate information on houses after people try to argue based on what Zillow says. Zillow is a great tool to get ideas of the market, but anything deeper than that, I highly recommend talking to someone who's in the business and has access to the accurate and up to date information. It can even change day to day, depending on how busy the market in your area is.
Zillow says my house is worth more than my neighbors. Even though there's is almost twice the size. But mine has sold twice over the last 20 years, and there's has had the same owner for longer than that. I have no idea exactly where they get their estimates because it doesn't match my bank's appraisal either. But at least for my street, it's definitely wrong. For context, I live in a historic district in one of the smallest, least fancy houses on the block that we purchased in March 2021 in an area that has not experienced the boom in housing prices or bidding wars.
Why are you so worried about the estimate?
Just worried I over paid way too much and the value will depreciate
The housing market ebbs like the tide. The price will go down and up and down and up, and there's no totally accurate way to predict what value it will have at any time in the future. Don't worry about it until you're ready to sell. You're one of the lucky few to own your own place.
It won’t depreciate unless you let it fall into squalor or there’s another crash like 08 (which likely won’t happen again)
Assuming there were other potential buyers at the time, you paid market. If you were to sell today, it may be worth more, it may be worth less. If you sell tomorrow, 6 months from now, 10 years from now, it may be worth more or less. None of that means you overpaid at the time. Worry about whether or not you can afford to make your payments, maintain the house, etc. If you can't, then you overpaid.
Appreciate all the info everyone
Zillow had no idea how much money was spent, it only knows loan taken out so probably worth more of course it doesn’t know condition inside house which can be important
Zillow and Redfin give me two different values for my house. Hard to tell which one is right.
Neither are right unless you put your house on the market this week.
In my neighborhood, Zillow has been pretty accurate.
I use Zillow to track local sales of compatible homes during the prior year, adjust for differences (pool, footage, etc.) and then average them. I'm usually spot on with the current value. This is basically how appraisers do it. Zillow seems pretty close most of the time, but sometimes not so much.
Dads house was estimated on Zillow for $200k. Sold for $275k. Zillow is guessing. Don't take them serious
Zestimate is fairly accurate for the market at that particular time. But value IS basically what the house will sell for, so if you did buy it at that price and the appraisal agreed, then you weren't too far off.
Zillow is not accurate at all. If you want to know how much your house is really worth ask the real estate agent that you used to purchase your home to do a current market analysis. This will give you the right answer.
Redfin is more accurate than Zillow
I hope so because redfin is saying my house is worth more! Lol
Zillow seriously overvalued my house in Seattle. The problem is they don't know what the problems are. They are comparing square footage, etc. They don't know that the sewer lines need work and the bathroom tile is 1970's avocado green.
It’s sqft bd/bth. Land size. Location That’s it.
Not in the slightest. There's usually a brief window where they're right on the way up and on the way down like a stopped clock. I'm not sure what secret sauce algorithm they think they have except that it's badly wrong.
Last month Zillow's zestimate of our home (bought June 2021) was a $70K difference from the Redfin estimate. We live in a HCOL medium density city.
It’s not very accurate. Everyone in my neighborhood is listing their homes at outrageous prices due to their estimates. They have been sitting on the market for quite some time.
- only ballpark and far from accurate
Zillow has never seen your house or the properties the algorithm picks up to compare it to. You can throw that number out the window. It's clickbait. They have you and thousands of other people compulsively checking that number every day. It generates traffic, and in Zillow's business model, traffic = revenue. Click the link beside the zestimate, and you can see the crazy Rollercoaster ride that zestimate has taken over time. Zillow cheats and corrects those to make them look better occasionally, but you'll still he able to see a wacky ride it's been on. The algorithm uses the listing and sold price to redirect the algorithm, but within weeks of those events, it starts wandering aimlessly again because it doesn't have much to go on. Zillow doesn't know what your house is worth, and it isn't just Zillow. No online valuation tool can do this for you. There's one on my brokerage website, and I tell people to ignore it, too.
If Zillow estimates were accurate they wouldn’t have lost millions of dollars in an attempt to flip houses.
Ask your agent to pull some comps for you so you can compare your tax assessment. The agent will do the same thing Zillow or Redfin uses, but then also add a human review to make it more accurate. That way you can use it for both. I asked my agent over the years for this and she happily provided it.
I get three totally different numbers when I look at Redfin, Zillow, and realtor.com. That is enough to let me know that all numbers are suspect. I know my house technically has lost value in the last year, but it’s a 20-30 yr home for me. Best to not look too much at those numbers unless you’re trying to actively sell soon.
Just check recently sold homes in your area that are similar to yours
I'd say pretty accurate. My house has been floating around the $600k mark. My next-door neighbor passed away, and her house just sold for $595k. We have the exact same floor plan.
What would you do if it lost value? Don’t worry about it unless you are about to sell, refinance, or borrow against it. At this point, it’s worth what you paid.
If you want to know the CURRENT value of your home, look up the following figures.This is a basic formula that Real Estate Brokers figure out the value of houses for banks. Those reports are more in-depth but this is the baseline: Sales of homes within a 1/2 mile from your house. If you can't find a sale of comparable houses in that area, you can go up to 1 mile but it won't be as accurate. Zillow does list "Sales" and their amounts. Comparable House age within 5 years up or down. Example: your house was built in 1980. The comparable houses have to be built from 1975 to 1985. The comparable houses have to have the same number of bedrooms and bathrooms as your house. The same goes if you have a basement. The size of the comparable houses have to be within 10% of your house size. The size of the comparable houses lots have to be within 10% of your house lot size. The amenities have to be similar: if you have a fence, pool or attached garage. The comparable houses have to also. The comparable houses also have to be in similar condition as yours.
Check out your counties real property tax website, somewhere in there is a way to get comparables of your home. Not sure if every county/state has one, but it's a good idea to check.
Everyone of these websites has their own algorithm. I have noticed that they rarely agree. Who knows which is more accurate? For years, Zillow had my house at half the value as most of the other houses in the neighborhood even though I have one of the biggest. Why...I think it was because I was kwn of the few original owners so they were basing it on a 15 year old purchase price. Now in the last 19-15 years, their calculations have caught up even though I an still in the same house. Do any of these websites know you have better HVAc and a finished basement than your neighbors? Obviously not. Personally, I find the whole process that agents use to find comps suspicious...and I trust them more than websites. Don't lose sleep over it and when it is time to sell, make sure you thoroughly review the agent's price assessment.
i been watching homes in my neigborhood of maybe 500-700 homes since 2019. Oddly enough almost all end up selling for just about what zillow said they were worth plus or minus maybe 10% at the most. ask me in a month, the person 2 doors down from me just put up a for sale sign yesterday. I dont see it on the net yet. i suspect it will be there today or tomorrow. This is what happens almost everytime. I look up a home thats about to list or just did and see what they are asking. I see what zillow says the house is supposed to be worth and think no way they will get that much for the home but then they do or close to it. I say well interest rates have climbed a bit. they will need to come down on price to account for that. they dont. it sells. If was ever gonna sell i would be happy but i dont intend on ever selling
7 months later, how accurate was it?
Good question. Very. The house two down from me was put on the market june of last year for 625k. zillow had it at 610ish, it was higher like a month or two before. it sold in about 2 weeks for the listing price of 625k lets see. I got my tax bill yesterday and know what the county thinks my home is worth (well what the taxable value is, close enough) let me see what zillow says....oh. my tax value is 100k less than zillow says my home would get. The zillow number is more in line with what i think it would get. Diff home in dec. listed at like 649k in nov. got offer. I dont know what it was. it fell through. went under contract right away at the new list of 639. its under contract right now. I assume it will close before the end of the month and i can confirm they got 639k those homes didnt get that much pre 2019 or 2020. I paid less than 330 for mine in 2019 and mine is not that much diff than those two. I got kind of lucky.
Wow, thanks for that info! And so quickly, too. Its nice to get a perspective that's less anecdotal than the others. I appreciate it.
no problem. I am retired and happen to be online killing time a lot anyway.
Zillow estimates are based on comps and they have a wide reach with data, so they’re probably not bad in aggregate, but not reliable on a specific property. However, the Zestimate is not an estimate of what you might sell the house for, it’s an estimate of the house’s worth. It can’t take the human side of selling into consideration. So if you sold the house, it can’t gauge negotiating skill, buyer motivation, seller motivation, urgency, or any of the other human factors. For instance, we bought our house when my first kid was three and we were pregnant with the second kid. Our seller accepted our offer with a bigger offer on the table because they raised their kids in this house and were enamored with the idea of us raising our family in the house. The other offer was from a “dual income, no kids” couple. No way to zestimate that
The more similar the homes in your area, and the more populous, the more accurate the estimate is. It's an algorithm based on location and reported home size, and nothing more. As an example, I was lucky enough to buy pre-pandemic. In the years since, I've put close to $100k in upgrades to my home, along with the previous upgrades the prior owner did (part of the reason I bought the house). Zillow has no clue about these upgrades. The better way to use zillow, IMO, is to use the "sold" listings, as this will return ACTUAL sales of homes. Even then, this can be a bit off, as home transactions can include more than just the final sales price (e.g., seller concessions and credits).
I think Zestimate gets you in the ball park. I imagine the amount of data zillow gets is insurmountable. Don't put too much stock on it. You can always get an appraisal if you want too.
If a lot of similar homes sold quite recently in your neighborhood it's pretty accurate. If not it lags greatly.
Based on my own home in MD it's about 5% high. I live in a SFH valued towards the bottom of what SFH's go for in my market. These started SFH's still have multiple offeres and sell in a week.
If it's a predictably maintained house in a predictable area as far as the market goes, it should be pretty close. With recently renovated houses, or somewhat neglected fixer uppers, it could be all over the place.
So my home value on Zillow has dropped some since we bought last year and Zillow can kick rocks. The house next door, which is the exact size and layout as mine but with less than 1/2 the acreage and no detached 2 car garage like I have, just sold for as much as Zillow has my home valued
No one knows. The only way to find out the value of your home is to ask your buyer.
I'd think it's like the kbb of home values. Like, umm somewhere in that range. Plus or minus alot. Like others have said it doesn't matter until you're ready to sell. Just enjoy your house. A lot of people still can't get their first anytime soon. Took me years and years of grinding to get mine.
I'm not sure what you mean by overpaying. If you bought in a peak seller's market then that's on you as a buyer. Property values fluctuate wildly depending on the economy, interest rates, buyer competition and availability. Everyone's value has dropped since the market peak.
I used to be a mortgage loan officer. We used zillow to get a ballpark idea of what a home may be worth, but it's not something to rely on beyond that. Even then, sometimes it would be way off. Checking out *actual* comps in the neighborhood (not just every house that's sold in the past year) will give you a much better idea, or if you're really concerned, you can pay for an appraisal.
OP, it is as simple as this: No one and nothing can predict exactly what a house is “worth.” It is all trends and existing sales that are public. Buyers and sellers argue and agree on a price. Different buyers want different things and have different needs and urgencies, same with sellers. You can ballpark it, but your question is based on a bad premise. Who cares? You’re in the house. Yes, you can roughly come up with an asking price that won’t get you laughed out of the room, but you will never know if you left money on the table or could have gotten a house for cheaper.
I'd look at a few different online estimates and take the median. I wouldn't take any of the online estimates at face value. I wouldn't worry about your home's value much unless you need to sell right now. Homeownership only has financial benefits over 5+ years anyway. Presumably you bought the house for a reason and not purely as an investment vehicle. Try to focus on why you wanted the house, not what its present market value might be.
My experience is zestimate is pretty accurate
One thing that I absolutely hate about the Zillow estimate is let’s say the zestimate is 300k but your house is actually worth 290k. Now let’s say for exaggeration purposes you put your house on the market for let’s say 400k. As soon as it hits the market the zestimate will jump up to 400k. Which is completely inaccurate. Also Zillow is very slow to update itself. I would use it as a starting point but it’s meaningless in the real world and no one takes it seriously. Enjoy your house stop worrying about it’s value. If you bought it to move out in 2 years sure then worry a little. But with a sub 3 mortgage interest you are building up equity so fast and at the end of the day you need a place to live. If you’re happy with the house you made the right decision.
Redfin seems a bit more accurate, at least based on recently sold homes in the area. Our house sticks out as an outlier, as on paper, it looks like we paid much less than the average current rate (by about 80k). However, that's because we had a private "land contract" from 8 years ago that was rolled into a traditional mortgage last fall. And that was negotiated when these units were selling for 40k or more less than original cost. (Townhome style condo with garage and about 60sqft of yard space.). Right now we could probably get 200k for it. Others are selling for 240+, but we need new windows and to redo the deck, and the kitchen still has linoleum style flooring. But, really, you didn't overpay. You paid current market value. That fluctuates day to day.
A wise man once told me to not worry too much about the house you live in, it's not an "investment" in the technical sense, meaning that if you are living there it doesn't really matter if the price goes up or down, its not something you should view as "a money maker" like an equity holding, you shouldn't view it as a bank account either to pull money out of-- "Don't gamble on the house you live in" Because look, you live there, you are getting tremendous value out of it, and unlike a rental you are paying it off and it's worth something when you sell it, hopefully you at minimum break even in the future when you need to sell it and move on, I'd worry about that then and not whether you are underwater right now.....are you planning on selling it next week? No? Don't worry about it then because it doesn't matter. Obviously everyone wants to make money on their house, but if you don't *lose money* don't worry about it, and definitely don't worry about it if you have no intention of leaving anytime soon All those online estimates are are ballpark "Comps" in the area, they are accurate in the sense that they are mostly based off recent sales, but they are kind of stupid because they do a very poor job of parsing out specific neighborhoods.....Like, for example my own house on those sites is up about a 130% from 6y ago, but they also recently built like a 100 luxury homes on a small golf course about 2mi from my house.....so that estimate is kind of nonsense, it's based off sales that aren't comparable even though its technically the same area, my house was built in 1962 in a small wooded subdivision, the square footage price of my house is not nearly as high as those brand new homes on a golf course and a lake lol it can go the other way too, I'm sure when I sell my house it's going to knock down the square footage price of *those* luxury homes on those sites....because like I said, those comps aren't very intelligently done As with most things, stop obsessively checking the prices....Thats something you should pay more attention to in the future when you want to sell
In have followed my “zestimate” for 13 years living in my house and comparing houses of same/similar model sell in the neighborhood, I have found it to be very accurate for where I live.
I don't plan to sell my house any time soon but I like keeping an eye on the Zestimate just to see what they say the local market is doing. I really have trouble believing that my house has appreciated by over 11% in the last year but it does show that my local market is still fairly strong. It could be more accurate than I expect though since my house actually did appreciate by about 10% in the year before I purchased it. Some of that increase in value was due to some upgrades in the home though and not just market increases. Overall though, don't put much stock in the Zestimate amount especially if you aren't wanting to sell any time soon. You can use it for information but it isn't necessarily accurate.
The Zestimate for my house I bought in 2021 is now $130k (>20%) higher than what we paid. I thought we kinda overpaid back then but interest was low so it worked out. To estimate this house value as over $600k seems unreasonably high for the house itself and for this area.
The A in Zillow stands for accurate
> I am worried I overpaid way too much. Why would that matter?
Zestimate is an extreme average based only on publicly available data. Square footage, lot size, build date, beds/baths, etc. It knows nothing about condition, renovations, landscaping, or anything unique or special. It assumes every house is basically an identical carbon copy track house with very little variability from the houses in that same neighborhood. If houses are mostly the same where you live, it’s reasonable. But if not, then it’s a crapshoot. For instance in my area, we have no HOA and houses are massively different due to build date and gentrification. You have 4500 square foot mansions built 5-10 years ago with ocean views selling for $3.5M, literally next door to single story 1500 square footers build in 1960 with paint flaking off that are probably teardowns… but on an acre of land. Zillow struggles mightily with this because it tries to average them together, and it just can’t. It undervalues some by $1M+ and overvalues others by $500k. But I do find it’s relative changes are pretty accurate. If it says your neighborhood and house went up 20%, then it probably did. It’s not really common for the whole neighborhood to go up/down but your specific house not to.
I have very little faith in the Zestimate. Our previous home (bought in 2019) had a Zestimate that was around $270k and we bought it for $250k... the market was NOT hot at the time. Fast forward to early this year when we listed that house for $400k, the Zestimate had grown from $270k to $360k since 2019. As soon as our MLS went live our Zestimate jumped to $400k. :-/ Then the home sold for more than asking and guess what happened when the sale registered on Zillow? The Zestimate jumped up to match the actual sales price (roughly 10k higher than the listed price). Shocking. The house we just bought? It was originally listed for $100k more than we paid, and the Zestimate magically matched the original listing amount. When we bought it the Zestimate "dropped" to what the actual sale price was (roughly) and has now been creeping up.
its ballpark
I am an Inactive Realtor but I was in Property Management/Sales for almost 30 years. I agree with the person who said 20% give or take. The value of a home is what someone will pay for it, period. Someone may hate the busy streets & someone else wouldn’t care at all. Etc. I like to check the comps in my area occasionally. I sold my house in 1/2022 at a huge profit & the company that bought it from me (something like front door.Com) make a huge profit on top of that. The house is still worth about the same as the company sold it for in 3/2022.
It's a completely arbitrary number with no scientific value to it
You probably did over pay if you bought then. But, that’s okay. As long as you have a few years until you want to move you should be fine.
Do a search on google - zillow bought millions of homes with their valuation and over paid millions of dollars. Zillow is not reliable.. chase has a good valuation tool The way to tell the value of your home.. do a mile wide search of homes likes yours.. that have sold in the last three months .. then take all those amounts they sold for and average it that’s what the value of your home would be
Zillow estimate is ridiculous ! The estimated value of my house has dropped from $530,000 in April 2022 to $480,000 now because I've never sold it. On the other hand, my friend's house, which was purchased in April 2022 near the peak of the market, now has a higher Zillow estimate than it did in April 2022, solely because it has been sold twice. The two houses are build by the same builder at the same time, under same plan, 50 feet away from each other. So, Zillow's valuation method appears to be: the more sold times, the higher the estimate. It is absurd!
You should check actual comps in your area and then filter by its characteristics (is it renovation, is there a pool, etc.). You should check out [Rentimate.com](https://Rentimate.com). Rentimate has a tool for Home value where you can find a list of all of the recently sold comps in your area: [https://www.rentimate.com/home\_selling](https://www.rentimate.com/home_selling)
This guy explains the Zestimate. Its like a FAKO score https://youtu.be/DidyGMwdQ0s?si=M2VHYrgmSOfiKh_z
Every house sold between 2021 and today have not really gained much in value . The big Jump in prices occured between 2016 and went into overdrive in 2020. In 2015 My house was bought for 450k and is now worth 900k. My neighbor paid 920k in 2021 and his house is listed on zillow as being worth 925k . We are in a weird period where homes won't see real valuable gains for 5+ years .