Zillow Estimates: Reality or a puff of some type of air????
by Curtis Van Carter on August 27, 2008
I received this Zillow newsletter today and decided to check it out for accuracy.
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Real Estate Market Trends in Yountville
According to the latest Zillow Real Estate Market Report, home values in Yountville decreased 8.10%% in the second quarter of 2008, compared to the second quarter of 2007. Nationally, home values decreased 9.9% during this same period.
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It’s True: Homeowners are in Denial
According to our just-released Q2 Homeowner Confidence Survey, 62% of U.S. homeowners believe their home’s value has increased or stayed the same in the past year. In reality, 77% of U.S. homes have declined in value over the past 12 months!Consumers Need Your Expertise
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Obviously, Zillow may be using their own “Zestimator” to come up with these values or some other data accumulator such as DataQuick to which I have no access. The only database I have quick access to is my MLS, BAREIS. In Napa Valley, BAREIS listings represent approximately 95% of all residential properties sold here. Thus I compared the sold properties in Yountville for second quarter 2007 vs 2008:
2007 7 sold median price $675,000 average price $656,286
2008 7 sold median price $530,000 average price $590,537
Comparing the median price, which is what I believe Zillow does, shows a 21.5% drop from 2007 to 2008. Obviously, Yountville being such a limited number of sold properties, it takes only one sale to eskew the numbers but the difference between Zillow’s 8.1% makes me think. Maybe HOT AIR???????
Tagged as:
Napa Valley,
Real Estate current info,
Real Estate current info,
real estate stats,
zillow
{ 2 comments… read them below or add one }
I did a quick comps search of sales in Yountville zip code 94599 in the last 6 months and found 9 closed sales with Median price: $535,000
Low price: $425,454 Median Price per SF: $459
High price: $1,120,000 Median Gross SF: 1,200
http://propertyshark.com/mason/Comps
Hi Curtis, it’s David G from Zillow,
Zillow’s data reports on the change in value of all homes whereas a median sales price analysis only considers those few homes that sold. In a changing market, median sales analysis is a flawed measure of value because it is easily skewed by a change in the type of homes sold. In a bubble market, a median sales analysis will typically identify the market peak much later than it truly happens and will typically also overstate the decline once it does detect that trend. And as sales volumes decline, there’s less data and more noise in a recent sales price analysis.
For a more detailed discussion of this problem with median sales analysis, read this blog post: http://tinyurl.com/5v4g2k
The short story is a good one; homes in your area most likely did not lose 21,5% of their value in the last year.