Every homeowner, person shopping for a home, or homeowner with a neighbor has probably scouted Zillow and has also seen a Zestimate of their home. A Zestimate is just another opinion of value. And you know what they say about opinions!
Zillow uses proprietary valuation models that identify relationships between home-related data and actual sale prices in geographic areas. Data sources include physical attributes of homes, tax assessments, actual sale prices, foreclosures and tax sales, and user-submitted information. Think about the word "data." What comes to mind? Perhaps some math problems, or numbers swirling together and bar graphs? Zillow uses this kind of data, as well as user-submitted information and physical attributes of homes to determine a dollar amount determining a home's value.
Surprisingly the national median error is only 8.7% and Zillow claims that nearly one third of estimates are within 5% of a home's sale price. So, by the numbers:
There are 1,000 homes in a geographic market for sale, and the average sale price is $175,000, for example.
Zillow prices 333 of those within 5% of the home's sale price. And within 5% of that average price those 333 homes could sell for $166,250 to $183,750.
Almost a $20,000 difference in opinion of price. That's quite a wide range.
To competently determine a home's true market value, homeowners, as well as home buyers, need to consider days on market, sold prices and seller contributions, staging advice, and absorption rates. Many REALTORS® understand how to report this data for their clients to give them a better idea of what their market is actually doing. This is considered a comparable market analysis, or CMA. The other determination of value one can receive is an appraisal.
For a complete analysis of the Jacksonville, NC real estate market conditions, call or email Amanda! Or check here for a market valuation of your home! You can use this to compare with the Zestimate to monitor the difference! Good, bad, or ugly!
