"Zestimates" Are they really inaccurate?

Medford New Jersey 4-1-2015 to 4-18-2015

I believe they are more accurate than the initial asking prices established by listing agents and sellers.

I looked at the 12 homes from TREND MLS sold over a 17 day period in Medford New Jersey. Zillow's "Zestimate" exceeded the sales price in 7 cases and was under in 5 cases. I then looked at the Municipal value assessment used for real estate tax calculation. In 7 cases those numbers exceeded the sales price. In 5 instances they were the same homes for which Zillow over estimated. Remember, though, that the assessment number doesn't change till a new assessment - there can be years between assessments so given time in an increasing market the assessment will be under value. It can be useful though in looking at RELATIVE values within the town. There has been a lot of talk about the accuracy of Zillow's "Zestimates". Zillow claims on its website that "Our data shows that half of all sales are generally above the Zestimate.". This small sample is not inconsistent with that claim. It is worth noting, though, that any type of average is just that - an average. In one of the 12 cases Zillow's "Zestimate" exceeded the sales price by nearly $120,000. Did someone get a really good deal? Maybe. Was it a short sale or other type of distress sale.  Condition and a local eye matter.   At the other end, the largest under estimate was just about $25,000.

Zestimate vs original price vs sold price

I give my clients a copy of the price history of homes we look at and, when it is offer time, a copy of the price history of homes used as comps. If it is fair to claim 'Zestimates' are not accurate then maybe we should look at the original sales price and the price history of the 12 homes used here. For each home, ACT is the beginning price and STL is the final sold price. Changes with corresponding dates are also shown. To see the price histories go here.  After you look at it you can draw your own conclusions. You can also contact me for more information.

Paul Howard
Broker/Owner NJHomeBuyer.com Realty
Cherry Hill NJ 08034