Zillow’s zany zestimates.
My Take:
Here is a great article about Zillow.com which is a good website for looking at the values for your home and your neighborhood. Luckily, in Arizona, home sales do become public information and everybody can see what homes are selling for. A couple of things to keep in mind about Zillow, the information on recent sales lags about 4-8 weeks and in older neighborhoods, like in most of South Scottsdale, the amount of remodeling and updating can vary greatly from home to home and thats not always reflected in Zillow’s home value estimates.
By Lesley Mitchell
The Salt Lake Tribune
Salt Lake TribuneArticle Last Updated:01/27/2007 11:30:08 AM MST
It’s easy to see why Zillow.com is one of the most popular real estate sites on the Web.
Americans are preoccupied with real estate these days and with how fast they are building equity, compared with everyone else.
At Zillow.com, anyone can type in an address - to their own home or one owned by their neighbor, business associate or even their boss - and get an estimate of what that property is worth.
But Utahns should take Zillow’s estimates- called Zestimates - with a healthy dose of skepticism, although that’s not necessarily Zillow’s fault.
Zillow has problems coming up with accurate home values in 10 states, including Utah, where selling prices are closely guarded by the state’s real estate agents and not considered public information.
“In Utah, we’re taking our best guess,” said Amanda Hoffman, a Zillow.com spokeswoman. “We have quite a ways to go in terms of accuracy.”
Ryan Money, a Salt Lake City technology entrepreneur, found out that the hard way. Money first logged on to Zillow last year, where he was shocked to see his Sugar House home listed for a value of $1.8 million, at 1,900 square feet.
His home actually has 2,400 square feet and at the time probably was worth about $300,000, he said. Later in the year, Zillow updated the value of his home, listing its value at $258,000.
“I took a big hit from $1.8 million to $258,000,” he said, laughing.
Several weeks ago, Money refinanced his home and got an appraisal, which came in about $70,000 higher than Zillow’s current estimate of his property’s value.
So he took advantage of Zillow’s policy of allowing homeowners to dispute Zillow’s listing. But owner updates and comments do not immediately increase or decrease Zillow’s estimate of a home’s value.
Money, who believes real estate data should be more public in Utah, said he still remains a Zillow fan. “They obviously have some work to do, but it is such an interesting tool.”
Because Zillow cannot with a great degree of accuracy pinpoint home-sale data in Utah and nine other nondisclosure states, Zillow uses other sources of data - although it will not divulge exactly what information that is. Zillow touts a complicated formula that relies on a number of factors to determine value.
But the results are often questionable. A West Valley home listed on Zillow at a value of $242,000 recently sold for $195,000. Zillow listed the property as having 1,691 square feet; it actually has 1,800 square feet.
Or take the 4,700-square-foot Salt Lake City home recently listed for nearly $1.6 million that went under contract in six days close to the list price. Zillow lists its value at $776,787, with about 3,672 square feet.
Realtor Dave Winters said he doesn’t think Zillow is worth much as a real estate valuation tool. He said it is frustrating when buyers log on to Zillow and want to get a property for the price the Web site lists. The site, he says, has on many occasions listed an artificially low price that no seller would accept.
“Zillow is incredibly inaccurate,” he said. “It’s inaccurate to such a degree that it’s ridiculous.”
The chances of Zillow increasing its accuracy in Utah, however, appear to be slim.
In Utah, values set by a county assessor’s offices for property tax purposes are public information, as is the amount of the mortgage taken out on a property.
But assessed values can, in some cases, be very inaccurate measures of market value. And because buyers make down payments of such varying amounts, the amount of the mortgage taken out on a property is a less-than-accurate way to try and figure out market value.
Selling prices, most agree, really are the key to determining a property’s value, but Zillow’s chances of getting that data in Utah are not good.
Chris Kyler, legal counsel to the Utah Association of Realtors, said Utah’s status as a nondisclosure state is secure. Only those with access to the Wasatch Front Regional Multiple Listing Service can tap into selling price data and share it with whom they choose.
And he says the Legislature - many of whose members are real estate agents - have no plans to change that.
Kyler insists it is not control issue.
“We always have been [a nondisclosure state] and probably always will be,” he said. “We still really value privacy. It’s still one of the hallmark values supported by the Legislature.”
Kyler said in the age of identity theft, the less personal information that is released, the better.
Realtor groups in other disclosure states, however, say they don’t really see any good reason for a state not to disclose selling prices.
In Arizona, where Zillow says it has four-star accuracy - its most accurate rating - selling prices are public information. In fact, addresses and selling prices of individual properties have been published in a Phoenix business weekly for all to see for years.
In Utah, where Zillow says it has only one-star accuracy - its least accurate rating - the most any newspaper can publish are selling prices along the Wasatch Front by Zip code area.
“In Arizona, Realtors say, ‘That’s just how it is,’ and we accept it,” said Ron LaMee, vice president of information services for the Arizona Association of Realtors. “I haven’t ever heard anyone say that selling prices are privileged information and that it shouldn’t be public information.”
Selling prices on individual properties in Arizona are disclosed -and become public information - at the time a sale is closed.
LaMee said some celebrities in Arizona “get a little ticked off by it” when they see their real estate transaction in the newspaper but there has been no organized effort by real estate agents to change Arizona law.
“Consumers want the information - I just can’t think of a good reason not to provide it to them,” he said.
But consumers in Utah shouldn’t expect to get it anytime soon. So for now, they can enjoy Zillow.com all they want. They just shouldn’t take it too seriously.
Those in Utah logging on to the popular site “should look at it as a starting point,” said Zillow’s Hoffman.
lesley@sltrib.com
What is it?
* Zillow.com is a real estate Web site launched in February 2006 that attracts 3 million to 4 million unique visitors per month and is among the top five most popular real estate sites.
Nondisclosure states
Utah is one of 10 states that restrict public disclosure of home-sale data, including selling prices of individual homes. Those states are:
* Alaska
* Idaho
* Kansas
* Louisiana
* Mississippi
* Montana
* New Mexico
* Texas
* UTAH
* Wyoming
Source: Zillow.com
