October 2, 2008

Using Zillow.com to estimate home values

Are you curious what your home is currently worth? Homes in the US market have depreciated in most markets over the past year or two. Some areas are down a lot since 2006. Other areas are not doing quite as bad.

If you live in a major metropolitan city area then you can find the figures for median home values over the past couple years at the Realtor.com website. They track median home values here. Lets say you live in Anaheim. If you look at the figures at the Realtor site you can see that home values were 2005 : $691k, 2006 : $709k, 2007: $699k and now in 2008 they've dropped to $553k. These are median home values. It is a pretty decent bet that your home will follow the price trend for your city in general. Homes are down about 20% from 2005 to the 2nd quarter of 2008 in Anaheim. so if you live in Anaheim its likely your home is also down about 20% in that time period.

Zillow offers another source of information on home values. Zillow will give a value estimate specific to your own home. If you go to the Zillow.com website you can enter your homes address and it will tell you what the home is estimated to be worth. Keep in mind that the Zillow estimate is only a rough estimate based on general market trends. It may be off by a certain margin. If your home is in a scarcely populated area or has unusual traits then the Zillow estimate may differ a lot from the real value.

But Zillow is still a decent starting place to get a free and easy estimate on your home. I checked a couple randomly selected homes and found their 10 year price history graphs. First is a home currently in foreclosure from the Anaheim, CA area:



Another home is shown below. This one is from Seattle, WA:

As you can see the Seattle market has fared a lot better than the Anaheim market for these individual homes. The Seattle home is still up significantly from its 2005 price but the Anaheim home has dropped below the 2005 price.

You can get his same kind of chart for your own home at Zillow. Just keep in mind that the figures they cite are only a rough estimate. When I look at Zillow I use it for a ballpark figure. There are 2 key items to look for. Zillow gives what they call their Zestimate property value. This is their estimate of your homes value. For example the home in Anaheim has a Zestimate of $435k right now. Also make sure to look for the 'Value Range' which is a range of low and high estimate values. The Anaheim home value range is $322,270 - $444,210. Thats a very wide margin. The maximum of the range is 37% more than the minimum. So this is a clear sign that there isn't a high confidence in the estimate and the actual home value has a wide potential range. For my own home on the other hand the value range is only about 15% more for the maximum than the minimum. So the they have more confidence in the estimate for my home.

Use Zillow for ballpark estimates on your home but keep in mind the accuracy isn't always that high. Pay attention to the value range to see what the range of values is estimated at.

Graphics are from Zillow.com

No comments:

Post a Comment

Blog Widget by LinkWithin