So… Are you a homeowner? Have you used Zillow.com to check the supposed value of your house? Do you believe what they tell you? Well I sure as sh*t wouldn’t. Here’s why…
As many of you know The Frogette and I recently sold our San Francisco condo, and although the price wasn’t what we could have made a year earlier, we did well—a combination of buying well below our capacity and a market region that hasn’t completely cratered. But…if Zillow were the definitive guide to our home’s value, not only would we have taken a bath, but the new owner would have realized a 15% appreciation in just the time between when we accepted an offer and today.
What Zillow did was to torpedo their estimate of our condo’s value, dropping it 25% in the 3 month span from Nov 2008 to Feb 2009, with no evidence of a corresponding drop in our area. In fact, when the condo across the hall sold well above market in Mar 2009, Zillow did nothing. They didn’t even count it as a comparable.
Here’s the time-line:
- Early Jun 2009 – We decide to sell, Zillow’s estimate is 20% below the eventual asking price
- Late Jul 2009 – The condo goes on the market, Zillow’s estimate is 16% below asking
- Late Aug 2009 – An offer is accepted, Zillow’s estimate is still 10% below the sale price
- Late Sep 2009 – Escrow closes, Zillow’s estimate (even with MLS data to the contrary) is still 7% below the sale price (but they’re dragging it up almost daily)
- Late Oct 2009 – Now… a month since the close of escrow, Zillow finally has their estimate at the sale price, and guess what? That price is almost exactly what you would get if you drew a straight line across that huge valley on the graph.
It seems pretty clear. Zillow isn’t just reporting real estate prices and statistics, with maybe a zippy algorithm here or there to get a good bead on property values, they are blatantly trying to manipulate the market, for what reason…I have no idea. You can draw your own conclusions, but we’re very glad that potential purchasers of our condo, paid little or no attention to Zillow, and with good reason I’d say.