ZILLOW PRICES FOR LAKE ARROWHEAD HOMES are a computer-generated estimate. Zestimate formulas for Arrowhead Woods are developed from available San Bernardino County data on Arrowhead Woods, 400 sales per year from the 7800 total homes built.
On the surface, the method used by Zillow seems like it would give a pretty decent ballpark figure for the value of a home. And sometimes, it succeeds. More often though, Zillow estimates are off significantly – sometimes by 40% or more, not by my words but studies from economists and a dozen major media.
Zillow doesn’t know Arrowhead Woods averages 30 – 40 sales a month,
home values range from $200,000 to $15 million, there are no tract homes.
Apples to apples are great, but if you are in an area like Lake Arrowhead, where the age, size or features are varied, then it quickly becomes an apples to oranges situation. Both fruit, but very different kinds of fruit.
ZILLOW’S STATISTICAL MODEL USES ECONONIC DATA, BUT:
Zillow doesn’t know if the county data is correct; 4 bedrooms or 3?.
Zillow doesn’t know my TLC! My Bark Beetle tree loss created a view.
Zillow doesn’t know the value of an updated kitchen, new roof, or a deck.
Zillow doesn’t know if a lot is upslope or downslope; master on the main.
Zillow doesn’t know the value of a level entry, walk to the lake, an access road.
FROM ZILLOW’S WEB SITE, THE INDICATORS USED IN A ZESTIMATE;
- mortgage interest rate
- property tax rate
- construction costs
- number of vacant homes
- percentage of loans that are subprime
- percentage of delinquent loans
- supply of homes for sale
- change in household income
- population growth
- unemployment rate
All of this is combined with data on the characteristics of the individual home, which includes the number of bedrooms, the number of bathrooms, the square footage of the house, and the history of the Zestimate for the home”.
Per Zillow “We encourage buyers, sellers, and homeowners to supplement Zillows information by doing other research such as:
- Getting a comparative market analysis (CMA) from a real estate agent.
- Getting an appraisal from a professional appraiser.
- Visiting the house (whenever possible).”
Education is the key. As a real estate professional one thing you are always doing is educating your clients on all things real estate. The Zestimate is no different. You can explain – and show Zillow’s own accuracy numbers and talk about why the Zestimate is a good starting point as well as a historical reference, but it should not be used for pricing a home.” End quote.