Zillow “Zestimates” and home pricing

As we head into spring, we begin to see increasing activity in the real estate market in Williamsburg, VA. Many turn to the internet as their first resource, relying on websites such as Zillow.com to get a hand on their local market, from Annapolis, MD to Zenia, CA. How long can they expect their house to be on the market? What is the competition? What is the right price? While the internet is a great place to start to answer basic questions, there is no substitute for a licensed real estate professional.

Zillow and similar sites use public records and user-provided data to generate automated valuation models, or AVMs, known on Zillow as “Zestimates.” Public records and user-provided data can be inaccurate or outdated. Both sellers and buyers form expectations based on these numbers, and Zillow claims a national median of error of about 8%. Those error rates vary widely not only from state to state, but from county to county, and sometimes within the same neighborhood. They do, however, offer statistics on accuracy by state and county. Click the image below to find statistics for Williamsburg VA, James City County VA, York County VA, or any other municipality in the continental United States.

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Zillow Zestimate Accuracy Table courtesy of Zillow.com

These statistics are based on actual sales prices as compared to the Zestimate. To get the closest value from Zillow, make sure you look at recently closed homes and compare actual sales prices to the Zestimate, sorting for the most recent sales.

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Make sure to look for recent sales, not just listing prices and Zestimates for homes currently on the market.

The question many sellers have for their Realtor is whether or not they should allow their listing to be displayed on websites that use AVMs. There are a few factors to consider when making this decision. First, your Realtor should provide you with a Comparative Market Analysis (CMA) to find the right listing price, or may ask you to have an independent appraisal if there is not sufficient market data for the Realtor to confidently estimate value, or if your home has upgrades that are uncommon among similar homes. If your Realtor or an appraiser arrives at a value that is close to the AVMs, it would make sense to allow your listing to be displayed in order to increase visibility. If the value is drastically different, your first reaction will likely be to ask that your listing not be displayed on those sites. However, Zillow also shows AVMs for homes that are not for sale. Zillow will likely offer an AVM for your home whether or not they are provided with the listing information, but will only show that your home is for sale if you allow them the listing data.

Whatever you decide, try to remember that the formulas and data used to generate AVMs are never as reliable as the opinion of a licensed real estate professional with a thorough knowledge of the local market. I would love to help you interpret the AVMs to sell your home or purchase your dream home. You can text or call me at 757-254-8136 or email [email protected].

I look forward to serving your real estate needs!

John

This post was authored by local REALTOR John Womeldorf, known around town as Mr. Williamsburg, for both his extensive knowledge of the Williamsburg/Hampton Roads area and his expertise in the local real estate market.