Thoughts on "Zillow" and home value
I am not sure if many of you are aware, but there is a site: http://www.zillow.com/ that claims to have the tools to let:
Buyers: Compare values to avoid overpaying
Sellers: Use our tools to help set a price
Owners: Track your most important asset
Basically, it is trying to serve as a CMA (Comparable Market Analysis). I have a few concerns with it's calculation method... when I pulled "comparables" for my own 1307 sq ft, 3 Bedroom/ 1 bath home in Schumacher Place, the range of the "comparables" was a little odd. There was a 1 bedroom 943 sqaure foot home, some Merion Village homes a few blocks from Schiller Park, etc. When doing a comparison, it is vital to "compare apples to apples and not apples to oranges", right? You want to find comparables with the same approx square footage, features, like nieghborhoods, etc. I also pulled searches for a few of my listings and some homes I had given an opinion of price. I agreed with the range of about 50% of the results, some were as much as $20,000-$40,000 over what I calculated. Keep in mind, this is not a tool for agents, this is a tool for buyers and sellers. So, when you say "Compare values and avoid overpaying", is that accurate? Look at the current market conditions (see my trend graphic reports below). In the German Village Area in September of last year, there we 192 single family homes/ condos on the market...this September, there were 258, that is an increase of 74%! Can we really compare the value of our homes by sales from last year? The competetion out there is huge. Sellers and buyers need to not only look at recent homes sales, but, what the competition looks like, where is a buyer going to find value in your home? have they recently updated the home (especially the kitchen's and baths)?, how is a buyer going to find it?, what is the incentive to buy?, etc. As a buyer or seller, it is vital to find an agent that will help you do this.
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So, back to Zillow, apparently I am not the only one with concerns: CNNMoney.com
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My related article: When inventory is up, what is a seller to do?
