How does Zillow calculate housing values?
Very Badly. Its about 100k off on its estimate on the house Im living in. Also says we have a fire place. Lived here almost 30 years. Never had a fireplace. Says we have detached garage. We have no garage. Says we have 4 bedrooms. We do (but no way they could know that) so they are including the den as a bedroom. Says we have 1 1/2 baths. We have 1 and 2 1/2 baths.
In one word it's, "MAGIC".
Honestly I don't know the details of their algorithm, but I can guarantee it is based partially around the following 2 things, recent sales and tax assessments.
More important is how accurate are these Z'estimates? In my experience they have been pretty much dead on except in a few instances with outliers and houses with functional obsolescence.
For instance, I sold my first house a little over a year ago.
Sold for: $205K
Hope this helps!
@Benjamin Timmins brings up another good point. Sometimes the listings are missing or in his case adding things that the house has or doesn't have. Since the system is based off of house stats this will obviously throw off the valuation...
@Gualter Amarelo You need to take other things into account. Like properties being grandfathered from current tax rates. Mine is. Everyone around me is paying 3k or more in property taxes. I pay 1400. Got to love antiquated laws.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Join the Largest Real Estate Investing Community
Basic membership is free, forever.