How Accurate Are Online Home Estimates?
And Why Won't Interest Rates Go Down?
One of the more common questions I get asked is “how accurate is Zillow/Redfin/Homebot/Etc. in estimating the value of my home”?
Accuracy depends on a few factors. These online estimators are not that smart, they just work with publicly available data like:
the last known size, location and condition of your home
recent sales of any house/condo/townhome the computer thinks is like your house
And based on that, it offers you a wide range. For example, one recent house I sold was estimated, by Zillow, to be worth between $550-$650k before it was listed, with the official “Zestimate” on the low end: $575,000.
The house ended up selling for a little over $600,000. Not too bad Zillow!
Your House
The online tool’s applicability to your house will depend on the following mixture of factors:
Suburban or urban home with lots of similar homes nearby (more accurate)
Rural or custom home with few homes like it (less accurate)
Standard lot size (more accurate)
But the lot or portions of it aren’t useable (less accurate)
Made lots of improvements since the last sale? Upgrades? A new shop in the back? (less accurate)
Kept the home the same but well-maintained (more accurate)
Lots of home sales nearby (more accurate)
Slow market, few sales (less accurate)
Something happen to the house the computers don’t know about (less accurate)
Custom updates that match your unique tastes (less accurate)
But computers are only so helpful. They can only tell you what has happened in the recent past. The market is a living thing.. always changing, always moving. After the computers have had their say, it’s still my job as your broker to read the room, understand the market and give you a real estimate based on the reality of standing in your home and hearing feedback from actual buyers.
What About Those Falling Interest Rates?
Gravity stopped working guys… interest rates have gotten stuck mid fall. Fed rate cuts aren’t enough to bring them down significantly yet. Like I mentioned last time, no one knows when or by how much they’ll come down. But check in on them in the early spring. Maybe the sky will finally fall.
How Much is My House Worth?
If you’d like a computer to give you it’s best guess, here’s the online tool I recommend.
Michael Perrone is a licensed managing real estate broker in Washington State and is the owner of The Perrone Real Estate Group. You can reach his office at 425-224-6040 or by subscribing and responding to these newsletters.