It's 7am on a Friday morning, and I'm sitting here at one of my favorite Kitsap County WA haunts, the Global Bean, enjoying a delicious Cup 'O' Joe, waiting for my good friend and blogging counterpart, Mark Flanders, to arrive.
On an adjoining table, the following headline on today's issue of the Kitsap Sun catches my eye:
"With House Values, What Went Up Has Come Down"
According to the article submitted by Rachel Pritchett, if you purchased a home here in Kitsap County WA in 2006/2007, when prices had peaked, then there's a one-in-three chance you own more on your mortgage than your home is actually worth today.
And the expert source for such a sobering dose of reality?
Why, our Friends at Zillow.com, of course!
Zillow also claims that home values in Kitsap County WA have fallen 12 percent since the Spring of 2007, and are now back down at 2005 levels. The Seattle-based company calculates its home values based on median price, tax assessments, physical characteristics of the house, and comparable sales.
As a locally licensed real estate professional here in Kitsap County WA, my experience with Zillow's 'Zestimates (their name for estimated home valuations) have varied. Sometimes their estimates are high, other times they're low. I usually find them to simply be a 'starting point' in the conversation with Buyers and Sellers, and set the stage for my own detailed comparative market analysis (CMA).
My point here is not to necessarily argue the reliability or accuracy of Zillow's figures, but rather to draw attention to their obvious ability/success at establishing themselves as a perceived leading industry authority, even for very specific local markets like Kitsap County WA.
Regardless of what you may think about Zillow or their Zestimates, you have to admit they've done an impressive job of creating a viable Internet presence, and cultivating their position as a leading voice in the real estate industry.
I just had an agent quote me a zestimate as justification for the listing price of a home. I just gave him a blank look. I don't think I needed to say anything because apparently my facial expression said it all. He quickly started talking about the local comps instead.
Maybe you should offer to write an article yourself to put the facts straight. A good way to get some free advertising!
Hi Rich, What surprises me more is for as many years as I can remember, National and state associations have preached how important it is for an agent to have a reliable on line presence and that consumers consistently want information about property valuations in their area. NAR with a share of ownership in REALTOR.com has always claimed to be the most reliable source for property information. Isn't it odd that it took 2 years from Zillows setting themselves up as expert in Valuation arena before NAR included the property valuation as part of REALTOR.com. Seeing as how they already had access to sold data throughout the entire country. And the tepid effort at launch was actually not as good as Zillows approach. Wouldn't one have expected better, sooner.
When it comes to 3rd party aggregators which membership have been warned about for a lot of years, we certainly as an industry have not even tried to compete in these areas.
Well ya gotta love'm. They filled a void folks were looking for and whether we as agents and brokers like'm or not they're here to stay. I haven't seen an impact by Zillows presence and doubt anyone seriously looking to price their home relies solely on their product. Just another obstacle.
Gene Quinney
Everyone who has an internet presence gives information that is 'deemed reliable but not guaranteed'. I beg to differ on the accuracy of Zillow and all the rest compared to what we do on hand and right NOW. There is a big difference from month to month everywhere...ours keeps fluctuating up and down. When I looked at Zillow in August to compare to a listing I found it to be a year old. In actuality, that listing sold for $75,000 more than two years prior when they bought it. Go figure.
I bought in 2006 and I know that my home is worth more than what I purchased it for. However, if I could put my home on the market for what Zillow has its' "Zestimate" set at I would be using my own post hole digger to insert my sign! lol! Zillow is about $100,000 off. I do enjoy Zillow and I do participate there and I do use their "widgets". If nothing else they have enabled me to engage some of my blog readers which is good.
It just goes to show that "value" is a relative term. The thing that Zillow has that we don't is a 24 hr a day, instantaneous source for Home Data without having to deal with pesky Realtors and all their calling, mailing, and general harassing. I have heard this from numerous people when I am not wearing my Realtor hat. Their data always lags as well, by typically 2 years.
Additionally, I'm not sure any educated person takes the Kitsap Sun seriously. I get the paper solely for the coupons and amusement of their lack of journalism, specifically when it comes to sports, and now Real Estate.
Marty
Hi Rich
I find Zillow to very at times myself.
I always look forward to your posts!
Sincerely
Tom Braatz
Rich, Most non-realtors that I talk to rely heavily on Zillow and the numbers Zillow publishes. Most find the information even more accurate than the local MLS.
Reading your post this afternoon and catching the mountain picture header, I drifted off into my mind remembering the beauty of the Pacific Northwest, imagining that taste of a good cup of coffee to warm up the crisp air......(I lived in Oregon for too brief a year)
Then snapped back to reality with phone ringing and cell paging....
I agree while Zillow lacks ability to know nuiances of remote market areas like Kitsap County, WA or even the unusual variance of 1 street subdivisions (one street selling $70-$80 thousand and the next street over selling $450-$500 thousand) like we have here in Baton Rouge, Zillow is here to stay. Consumers love the adventure of searching for themselves. Many of us were brainwashed in school that "knowledge is power".
I think agents like us in areas where Zillow doesn't work as well certainly have a "consulting" advantage that can make us shine when we come in and explain those nuiances! And gain even more points when we start with the same facts they worked so hard to serach out.
I think Zillow took off just like any public information site does. It is a way for the consumer to get information without having to ask for help. But unless they are going to list their home FSBO they still need a Realtor and you will have your opportunity to either agree with Zillow or show them the true comps for their home.
Deb
PS I like your music widget....I am going to check on that!
We agree, as a general site they are a cool tool that a consumer can get info when they want to. But the example below is why they are not the end all for getting a homes value.
Here is how Zillow has our own home valued. Zillow says that our home's current value is $388,500. We live in a 4004 square foot, 100 year old church that we have made into our home here in Vancouver, WA. Monday we had a full appraisal done and Thursday the bank called and admittedly said that this was a low and conservative appraisal. The conservative appraisal came in at $440,000 and they said that they knew it should have been closer to $500K. The difference between Zillow's $388,500 and the conservative bank appraisal of $440,000 is huge.
Rich, come on now, if Zillow says it and the News Media writes about it, it has to be right :) :)
Hi Rich... My experience with Zillow is that they are WAY off base. I had two nearly identical homes located next door to each other (same floor plan and square footage, just different front design) and Zillow had them over $50K apart in price, when by any real comparative method they would comp out identically. Zestimates are Zinaccurate at best!
Hey Rich, I think we could all learn a thing or to by following what Zillow does and has done. They have created respect and demand from the consumers. We can sit here and gripe about zestimates, but what good would that do?
The way they have branded themselves rather quickly is amazing. IMO there are some genius people working at zillow...
Rich - Zillow is not a common resource here in rural Missouri. I almost forget it's out there. What I know is from AR and other agents talking about it. Can you give a quick summary - how did Zillow get so high on the radar so quickly? Internet marketing blasts? TV blasts?
Rich,
Zillow does offer quite a bit of valuable services to real estate community, including homeowners and buyers. Zestimates can lurch this and that way, though, and that's where anyone has to be careful.
What's Zillow? At least the consumers in my market never bring it up.
They've created an Internet presence all right, but that's not necessarily good. My husband has found that it's almost not worthwhile to try to work with a seller who visited Zillow before calling him.
Zillow is not a big force in our little market. Yes it is there, but one house might be zestimated way high, one way low. I realize that their info is skewed - apparently, everyone here knows that:) I haven't had any seller even mention Zillow to me. But the site is interesting to visit.
I think that Zillow is a resource at best. It's not iron clad nor is it anything close to perfect. I think that it's an incredibly conservative guage. But it is growing in acceptance and as that occurs, so comes the power.
Thanks Rich for the post. I agree with what others have said and find that the Zillow information put out is not very accurate of up to date. AS a fairly new member of the AR community I pleased to see others are posting accurate market reports.
I like Zillow for putting my listings out there and increasing my online presence....but there is just no way a website can replace a "human generated" CMA. Unfortunately, a lot of consumers may not understand that.
I have had a couple people get their idea of a home's worth/pricing from Zillow. I always explain how this may not be accurate - and usually I am correct. I checked one of my listings that I have had over a year (dropping price consistantly) and they were way off. However, I agree with you that they do a great job in creating promoting themselves and being considered by consumers to be a reliable source.
Rich, Zillow is viral, not accurate but viral. They do know how to effectively market themselves...I'll give them that.
All Zillow did was put their numbers out there. The numbers don't have to be very accurate when no one else in the market is offering alternative data. Our local fishwrap doesn't quote Zillow because a local broker provides them with much better data. Unfortunately he's now being fined by the MLS. Organized real estate is its own worst enemy.
I think the misinformation that they send out does a great disservice to people. They are very very very inaccurate in our market.
I personally attended Zillow's Open House a couple months ago and was impressed by their information available to us. Zillow is now the second most visited real estate site in the nation and I would predict they will be number one in a couple more years. The agents who were at the Open House were using Zillow and thought highly of it. And their customer service is excellent. They really want to help.
You can fool some of the people all of the time and you can fool all of the people some of the time.
When your audience doesn't know what they're reading, you can fool all of those people all of the time.