I wish I could ignore it...but I can't (ZILLOW!)

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IMO
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Re: I wish I could ignore it...but I can't (ZILLOW!)

Post by IMO » Thu Nov 28, 2019 6:28 pm

Johnny Thinwallet wrote:
Wed Nov 27, 2019 12:59 pm
trevorshhh wrote:
Wed Nov 27, 2019 12:37 pm
I keep a net worth spreadsheet where I track a few values about my house over time: mortgage remaining, amount paid off (and percentage), and approximate current value. I base my house's percentage of my net worth based on approximate current value minus amount remaining on my mortgage.

For the approximate current value, I use Zestimate because it's easy to automatically query. It also seems to be about right (houses in my neighborhood were all built around the same time and have similar square footage and property and the Zestimate is close to what the recent ones have sold for). I thought about making it an average of similar estimates from other sites, but figured it wasn't worth it. I mostly pay attention to the other numbers in my net worth, but I want to account for this too.

Does anyone else use Zestimate for calculating net worth?
I do the same in regards to tracking net worth and attempting to approximate my home's value, though I have somewhat of an elaborate formula for trying to calculate my home's value.

I run a calculation with six different variables, assuming they are somewhat reasonable on the face of their values. Zillow, Redfin, Trulia and realtor.com are four of the six variables. The fifth variable is a standard inflation adjustment from my previous year's home value (so right now that fifth variable is +1.8% of my 12/31/18 estimated home value). The sixth variable is an adjustment from my previous year's home value using actual sales year-over-year figures from our local board of realtors (right now that sixth variable is +3.4% of my 12/31/18 estimated home value).

I take all six of those variables and average them. Then in an effort to be slightly conservative, I subtract 1% and then round down to the nearest thousand dollar mark. Finally, I take that final figure and compare it to recent sales comps of my immediate neighborhood of 500+ homes to see if it's reasonable. If yes, then that final figure is what I plug into my spreadsheet. I only update this once annually on 12/31 so it only takes about two minutes to update.

The only reason I do it this way is to try and "smooth over" any odd jumps up/down from sites such as Zillow or Redfin. Just for kicks, I checked now and the difference between the highest and lowest of my six variables is only $11k. The other four variables are all within that range.
My head is spinning . . . . you should contact zillow and tell them you have a better formula.

Honestly, if you use Zillow to look at recent sales and just do a reasonable comp to your home this will give you a reasonable idea of what your home would likely be listed if you were to sell.

Zillow really isn't that inaccurate if you live in a location with tract homes. The less cookie cutter the home, the more difficult to get a reasonable estimate. If one really want's an accurate estimate, then one would need to pay for a professional appraisal. But even that is just an estimate as the final sales price is not known until you sell and it's not unheard of that a home sells below or above a professional appraisal. It's just complicates the financing when appraisals differ from sales price/offers.

Not so sure why people obsess about home values unless one is going to be selling or buying. Zillow is helpful to see how much home your friends and co-workers spent on their home if that interests you.

Broken Man 1999
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Re: I wish I could ignore it...but I can't (ZILLOW!)

Post by Broken Man 1999 » Thu Nov 28, 2019 6:40 pm

Eh, my home has been all over the place at Zillow as well.

But, I hope to be leaving my home toes up on a gurney, so I honestly don't give a darn hoot about what my home's value is on such sites.

No intention of selling, no reason to care one way or another. I don't pay attention to our net worth, only our portfolio balance. Our portfolio balance dictates our retirement spending, not our net worth.

When homes are sold in our small subdivision, the trend is upwards, so I assume our neighborhood is still attractive and not deteriating. We keep our home in good repair, so I am confident a sale by us would be around what others have been sold. All the homes are similar in size, age, and maintained well. Great, quiet neighborhood tucked away in a short dead-end road. Little outside traffic except for the people who apparently can't read the Dead-end, No outlet sign.

I know others track their home's value for their net worth calculation religiously, but I don't. Can't see any value in it, myself. It is what it is.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven than I shall not go. " -Mark Twain

KyleAAA
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Re: I wish I could ignore it...but I can't (ZILLOW!)

Post by KyleAAA » Thu Nov 28, 2019 10:39 pm

MillennialFinance19 wrote:
Thu Nov 28, 2019 9:33 am
KyleAAA wrote:
Wed Nov 27, 2019 1:54 pm
MillennialFinance19 wrote:
Wed Nov 27, 2019 1:03 pm
My house is $280k on Zillow and the FMV would be in the $450k range. My neighbors was the same until he listed at $580k, at which point the value adjusted.

Long story short - if you list, Zillow will adjust.
Zillow does not take list price into account. What likely happened is that they got a lot newer/better data when the listing went live because the agent added it.
I know what they claim, but by having a Zestimate of $280k and a listing of $580k would make Zillow look bad. We’re in a rural neighbor that lacks a ton of recent sales, so I’m guessing they made the necessary adjustment based on the huge disparity. I could be wrong, though.
I have a good friend who is an engineer there. I’ll ask him.

westie
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Re: I wish I could ignore it...but I can't (ZILLOW!)

Post by westie » Sat Nov 30, 2019 10:35 am

The only value Zillow has is reporting the sold prices of houses. Everything else they do is subjective neighborhood figures that may have little to do with your own property.

HomeStretch
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Re: I wish I could ignore it...but I can't (ZILLOW!)

Post by HomeStretch » Sat Nov 30, 2019 10:44 am

andypanda wrote:
Thu Nov 28, 2019 7:50 am
Zillow is a joke.

They have my house listed as being "3 beds 1 bath 1,602 sqft" when it's only 1350 sq.ft.
Zillow uses town property tax records as one of the sources for its listings. Hopefully your town tax assessor is using the correct square footage in your property tax calculations.

seychellois_lib
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Re: I wish I could ignore it...but I can't (ZILLOW!)

Post by seychellois_lib » Sat Nov 30, 2019 8:55 pm

My home had been Zillowed at $670K. Visited the site recently and it was down to $630K it has subsequently been increasing by about $1K oer day, now up to $640K....sheesh. Having said this, I believe the lower number is more accurate.

What I find really annoying is the estimate record chart shows no indication it had ever been at $670K or the subsequent rapid value decline to $630K. It really is nonsense. The least they could do is provide a notification "Algorithm change, reset all factors, start over, reboot, don't worry, be happy". I suppose an actual chart of the actual value gyrations would reflect badly on Zillow so just reset everything and pretend.

Yes, hit the ignore button.

raixx017
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Re: I wish I could ignore it...but I can't (ZILLOW!)

Post by raixx017 » Sat Nov 30, 2019 9:58 pm

If this is too unsettling for you, have you considered getting an appraisal done? (admittedly, a costly affair)

bugleheadd
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Re: I wish I could ignore it...but I can't (ZILLOW!)

Post by bugleheadd » Sat Nov 30, 2019 10:06 pm

doesn't your home get annually assessed by the local government in order to calculate property taxes ? shouldnt that should give you a good estimate of what your homes market value is?

Freetime76
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Re: I wish I could ignore it...but I can't (ZILLOW!)

Post by Freetime76 » Sun Dec 01, 2019 11:40 pm

ARB57 wrote:
Wed Nov 27, 2019 11:34 am
...questioning the accuracy of home valuations on Zillow. ...
...That said I was STUNNED recently to see their estimate of my home nearly CUT IN HALF IN ONE DAY!!. I bought the home for $265,000 a little over a year ago, and until the recent drop, Zillow estimated its value to be about $285,000. Redfin and Realtor.com had similar valuations Zillow NOW says it’s worth: $159,000.
...
While I’m not trying to sell the home now, I have some health issues that MAY cause me to list the property sooner than hoped. Anything I can do? Ignoring it has been very, very difficult so far...
OP: What can you do? Just do not look at it? :confused

As far as I know, realtors don’t use (and won’t counsel clients to use) Zillow values. It’s not a negotiating factor, and new buyers can/should be educated as to this point. If you’re curious and haven’t already done so, click the Zillow link under Home Values, and expand each section - Comparable Homes, Local Tax Assessments, Local Sale Prices - to see what it shows you. I don’t understand why it uses tax assessments, though - ours is off by at least 50%, happily. We’ve not been reassessed in ages, and certainly not since the market improved.

Freetime76
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Re: I wish I could ignore it...but I can't (ZILLOW!)

Post by Freetime76 » Sun Dec 01, 2019 11:41 pm

bugleheadd wrote:
Sat Nov 30, 2019 10:06 pm
doesn't your home get annually assessed by the local government in order to calculate property taxes ? shouldnt that should give you a good estimate of what your homes market value is?
Not all areas reassess annually, or check accuracy vs actual market value for that matter.

tesuzuki2002
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Re: I wish I could ignore it...but I can't (ZILLOW!)

Post by tesuzuki2002 » Sun Dec 01, 2019 11:49 pm

ARB57 wrote:
Wed Nov 27, 2019 11:34 am
I’m sure we’ve all seen threads on this site and others, questioning the accuracy of home valuations on Zillow.

Granted, coming up with a spot-on “zestimate” of millions and millions of homes is no small task. That said I was STUNNED recently to see their estimate of my home nearly CUT IN HALF IN ONE DAY!!. I bought the home for $265,000 a little over a year ago, and until the recent drop, Zillow estimated its value to be about $285,000. Redfin and Realtor.com had similar valuations Zillow NOW says it’s worth: $159,000.

Crazy or not...it is unsettling. The fact is that a growing number of people do their initial home shopping on Zillow (and similar sites) to get a general sense of what homes are worth. As much as I’d like to ignore it all, I’ve been unable to do so thus far.

I contacted Zillow and they say they’ve made some algorithmic changes in order to provide even more accurate zestimates. What??? More accurate??? They say that if the property description is incorrect, I can provide them with the necessary corrections...but they can’t just remove or change the zestimate. I have no problem with the description/features as listed. Based on that description, Zillow said the house WAS worth $285,000...not $159,000. I shudder to think what they are now using as “comps”. For what it’s worth, a couple of days ago, Redfin dropped their estimate to about $159,000. Coincidence? NO. Redfin doesn’t serve the area in which I live...SO (I’m assuming,) they simply plug in Zillow’s faulty data. To their credit, Realtor.com still has the home valued at $267,900.

While I’m not trying to sell the home now, I have some health issues that MAY cause me to list the property sooner than hoped. Anything I can do? Ignoring it has been very, very difficult so far...
Zillow is an absolute FREAKING joke... They recently valued one of rental properties at $272,000. I couldn't get rid of that place for much over $40K if I really wanted to... How does that work? well it doesn't. Their financial data is complete garbage. A true realtor will be looking to real comp values. Not the garbage they estimate on their site.

JediMisty
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Re: I wish I could ignore it...but I can't (ZILLOW!)

Post by JediMisty » Sun Dec 01, 2019 11:59 pm

Phineas J. Whoopee wrote:
Wed Nov 27, 2019 3:12 pm
ARoseByAnyOtherName wrote:
Wed Nov 27, 2019 2:45 pm
Phineas J. Whoopee wrote:
Wed Nov 27, 2019 2:27 pm
That's part of why I carry my place on my books at book value, - the price the seller and I agreed to more than a decade ago - I have no reliable way to estimate its value as anything else. Marking it to an unknown market wouldn't be rational.
The market isn’t unknown though. You could certainly look at comps of recent sales to determine fair market value, and then discount that by some amount of you wanted to be conservative.
...
That's what Zillow does.

PJW
The problem with the Zillow estimate is there is no real comparison when there's an outlier. A nearly identical house 2 doors down went into foreclosure. When the bank out it up for sale, it was stripped of quite a lot of features including all plumbing and the entire kitchen. Not surprisingly it went for quite a bit under the zestimate of my place. But once it sold, the value of my place plummeted. It was bought by flippers and spruced up beautifully and an extra bedroom and bathroom added in the basement. A week after it went on the market after it's remodel the house between that house and mine went on the market. It had all it's cabinets, but was in generally shabby condition. So now there is two on the market right next to mine with huge differences in appearance and 150k price spread. I toured them both. They remodel had to cut it's price because of the price difference with the house next door. When both were sold, the comps just averaged all the sales prices with no regard to condition, finishes, or the refinished basement. What an eye opener.

Freetime76
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Re: I wish I could ignore it...but I can't (ZILLOW!)

Post by Freetime76 » Mon Dec 02, 2019 8:47 am

[quotqe=tesuzuki2002 post_id=4867828 time=1575262182 user_id=104615]
ARB57 wrote:
Wed Nov 27, 2019 11:34 am
I’m sure we’ve all seen threads on this site and others, questioning the accuracy of home valuations on Zillow.

Granted, coming up with a spot-on “zestimate” of millions and millions of homes is no small task. That said I was STUNNED recently to see their estimate of my home nearly CUT IN HALF IN ONE DAY!!. I bought the home for $265,000 a little over a year ago, and until the recent drop, Zillow estimated its value to be about $285,000. Redfin and Realtor.com had similar valuations Zillow NOW says it’s worth: $159,000.

Crazy or not...it is unsettling. The fact is that a growing number of people do their initial home shopping on Zillow (and similar sites) to get a general sense of what homes are worth. As much as I’d like to ignore it all, I’ve been unable to do so thus far.

I contacted Zillow and they say they’ve made some algorithmic changes in order to provide even more accurate zestimates. What??? More accurate??? They say that if the property description is incorrect, I can provide them with the necessary corrections...but they can’t just remove or change the zestimate. I have no problem with the description/features as listed. Based on that description, Zillow said the house WAS worth $285,000...not $159,000. I shudder to think what they are now using as “comps”. For what it’s worth, a couple of days ago, Redfin dropped their estimate to about $159,000. Coincidence? NO. Redfin doesn’t serve the area in which I live...SO (I’m assuming,) they simply plug in Zillow’s faulty data. To their credit, Realtor.com still has the home valued at $267,900.

While I’m not trying to sell the home now, I have some health issues that MAY cause me to list the property sooner than hoped. Anything I can do? Ignoring it has been very, very difficult so far...
Zillow is an absolute FREAKING joke... They recently valued one of rental properties at $272,000. I couldn't get rid of that place for much over $40K if I really wanted to... How does that work? well it doesn't. Their financial data is complete garbage. A true realtor will be looking to real comp values. Not the garbage they estimate on their site.
[/quote]


Our house value changed 200K in 2 years in the rural Midwest. The only explanations I have are:
1) we listed it at a price close to the “updated” number, and 2) the first number was absolutely, stupidly low. A nearby sale, in a low sale area isn’t really a comp if you’re a realtor, but it might have fed into the big Z’s oh-so-fabulous-and-proprietary algorithm.

(Edit it fix quotes)

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jfn111
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Re: I wish I could ignore it...but I can't (ZILLOW!)

Post by jfn111 » Mon Dec 02, 2019 9:34 am

No good Realtor would even look at Zillow Zestimates when deriving a value for a house. The problem comes when home owners get attached to the Zestimate, esp when it's higher then the agent's comps for the property.
I recently ran across a listing where we offered what the comps said the Condo was worth. The seller's wife had in her mind that the unit was worth what the Zestimate said. We moved on and at last look they had pulled the listing because it wouldn't sell at her price.

criticalmass
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Re: I wish I could ignore it...but I can't (ZILLOW!)

Post by criticalmass » Mon Dec 02, 2019 9:50 am

ARB57 wrote:
Wed Nov 27, 2019 11:34 am
I’m sure we’ve all seen threads on this site and others, questioning the accuracy of home valuations on Zillow.

Granted, coming up with a spot-on “zestimate” of millions and millions of homes is no small task. That said I was STUNNED recently to see their estimate of my home nearly CUT IN HALF IN ONE DAY!!. I bought the home for $265,000 a little over a year ago, and until the recent drop, Zillow estimated its value to be about $285,000. Redfin and Realtor.com had similar valuations Zillow NOW says it’s worth: $159,000.
...
While I’m not trying to sell the home now, I have some health issues that MAY cause me to list the property sooner than hoped. Anything I can do? Ignoring it has been very, very difficult so far...
I think the Boglehead approach is not to think or worry about investment valuation changes from day to day. That approach would also work very well for your own home.

Who cares what Zillow says unless you are selling your home to them. If you think their numbers are influential, take them to your local property tax appraisal office for your valuation adjustment. They will set you straight, fast. Or, alternatively, you can send Zillow a big thank you!
Last edited by criticalmass on Mon Dec 02, 2019 9:59 am, edited 1 time in total.

wolf359
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Re: I wish I could ignore it...but I can't (ZILLOW!)

Post by wolf359 » Mon Dec 02, 2019 9:55 am

What does your county property tax assessment say that the house is worth? That's the one that counts, because that's the one that determines how much tax you pay on the property every year.

Perhaps you can try to convince them to use the Zillow data and cut your taxes.

You want your home value for tax purposes to be as low as possible most of the time.

You only want it to be high when you're ready to sell it.

Quirkz
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Re: I wish I could ignore it...but I can't (ZILLOW!)

Post by Quirkz » Mon Dec 02, 2019 1:27 pm

Zillow is, frankly, kookydooks. Sometime if I'm not feeling lazy I'll post pictures of their chart for my house. It's got 10% swings on a monthly basis, in a location that's had mostly a smooth and steady rise since 2012. In one spot you'll see a modest townhome, which starts a bit below average for the area, spike to be worth quite a bit more than the average house (as if), and then plummet by 40% for no reason, then zig-zag all over the place.

Weirder, I'm one of four townhomes in a small plot. The Zestimate prices for the four units often vary by more than 35% from highest to lowest, despite being roughly equivalent. They've all had some work in the past 30 years, so there are minor divergences, but the floor plan and basic features are still really similar. If you looked at the Zestimate chart for the four units, they would look nothing at all alike.

Curiously, every time one of the units goes up for sale, the Zestimate, which may have drifted wildly, often snaps back to within a few percent of the asking price, as if by magic.

In short, it's a dumb automated tool that is terrible at its job. It should be ignored.

Also ignorable is NextDoor's price estimate, which has done such incredible things as email me two price change alerts on the same day, with different starting values, different ending values, and different changed-by amounts. Clearly their system is also broken.

Just talk to a realtor when you want to sell, and up with reasonable comps then.

AnonJohn
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Re: I wish I could ignore it...but I can't (ZILLOW!)

Post by AnonJohn » Mon Dec 02, 2019 2:03 pm

trevorshhh wrote:
Wed Nov 27, 2019 12:37 pm
I keep a net worth spreadsheet where I track a few values about my house over time: mortgage remaining, amount paid off (and percentage), and approximate current value. I base my house's percentage of my net worth based on approximate current value minus amount remaining on my mortgage.

For the approximate current value, I use Zestimate because it's easy to automatically query. It also seems to be about right (houses in my neighborhood were all built around the same time and have similar square footage and property and the Zestimate is close to what the recent ones have sold for). I thought about making it an average of similar estimates from other sites, but figured it wasn't worth it. I mostly pay attention to the other numbers in my net worth, but I want to account for this too.

Does anyone else use Zestimate for calculating net worth?
I do this too. I discount by 15%, since it's always seemed too. But lately it's gone haywire for me too. I joined the two commas club about 3 years earlier than I should have. Totally cheapened the sense of satisfaction achieved by chasing a long term goal for a long time! :)

Of interest: You can download alternative z-estimates via their API (not just the zestimate that appears on the website). They don't document it, but I think it's about 1-sigma (68%) high and low. You could use this to compute an uncertain in your net worth.

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RickBoglehead
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Re: I wish I could ignore it...but I can't (ZILLOW!)

Post by RickBoglehead » Mon Dec 02, 2019 2:06 pm

I find it quite funny the number of people that either average three numbers together (knowing one of them is garbage), or discount a number they know is garbage.

If you know it's garbage, perhaps picking a number out of thin air would yield the same impact on the average... :oops:

Here's a great example of how bad Zillow is. I live on the edge of a major college town. My neighborhood has over 100 homes in it, all similar in value, i.e. high end.

This is just a small sample of the garbage they put out.

On 6/5, my home was worth 1.0 (I am indexing the 6/5 value for privacy).
On 7/3, Zillow emailed me again to tell me my home was worth 0.964. I.E., my home had fallen in value by 3.6% in just under a month.
On 7/31, Zillow emailed me again to tell me my home was worth 0.908. I.E., my home had fallen another 5.6%, and was now down 9.2% in less than 2 months.

Today, I go into Zillow and my home is now worth 0.807. In other words, from 6/5 to 12/2, 6 months, my home has fallen 19.3% in value!

I can tell you that today's value is close to what my home would sell for, and that the value's back in the summer it also could have sold for, if there was several briefcases full of large denomination bills included. The June 5th value is the top tier in my neighborhood, and we are easily 15% below that, absolutely certain.

Zillow is kaka.
Quirkz wrote:
Mon Dec 02, 2019 1:27 pm
Zillow is, frankly, kookydooks. Sometime if I'm not feeling lazy I'll post pictures of their chart for my house. It's got 10% swings on a monthly basis, in a location that's had mostly a smooth and steady rise since 2012. In one spot you'll see a modest townhome, which starts a bit below average for the area, spike to be worth quite a bit more than the average house (as if), and then plummet by 40% for no reason, then zig-zag all over the place.

Weirder, I'm one of four townhomes in a small plot. The Zestimate prices for the four units often vary by more than 35% from highest to lowest, despite being roughly equivalent. They've all had some work in the past 30 years, so there are minor divergences, but the floor plan and basic features are still really similar. If you looked at the Zestimate chart for the four units, they would look nothing at all alike.

Curiously, every time one of the units goes up for sale, the Zestimate, which may have drifted wildly, often snaps back to within a few percent of the asking price, as if by magic.

In short, it's a dumb automated tool that is terrible at its job. It should be ignored.

Also ignorable is NextDoor's price estimate, which has done such incredible things as email me two price change alerts on the same day, with different starting values, different ending values, and different changed-by amounts. Clearly their system is also broken.

Just talk to a realtor when you want to sell, and up with reasonable comps then.
What he said.
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