My head is spinning . . . . you should contact zillow and tell them you have a better formula.Johnny Thinwallet wrote: ↑Wed Nov 27, 2019 12:59 pmI 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.trevorshhh wrote: ↑Wed Nov 27, 2019 12:37 pmI 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 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.
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.