 Most of you are probably familiar with the Zillow website www.zillow.com. If you currently use or are considering using our data, you will see that we use the Zillow Zestimate as a tool to help you determine the approximate value of a foreclosure property at our website www.InTheNumbers.com. The key word is 'approximate.' Before you use the Zillow data, you should visit their homepage and read the 'How To Use Zillow' link.
A key piece of data that is commonly missed by users is the Value Range. Have you noticed it? Value Range appears just below the Zestimate on a homes details page. To get there, search for a home, then click on "See home details" in the bubble on the map. The Value Range shows two dollar values; one greater and one less than the Zestimate.
Here is some information that Zillow posted on their blog that should help you understand the Value Range:
The Value Range is the first place you should look if you doubt the accuracy of
a Zestimate. A very wide range indicates that we'd probably agree with you. A
narrow range is a clue that we have good track record of accuracy in that area
(vs. sales prices) and that we're more confident in the Zestimate. Value Range
is calculated with the Zestimate and like Zestimates, Value Range also differs
from house to house. To illustrate this point, let's look at two homes in Washington State with similar Zestimates but wildly differing Value Ranges; House #1 is in Seattle's Fremont neighborhood. Here's its Zestimate and Value Range: House #2 is on Whidbey Island in Island county (also home to the endangered Orcas of the Puget Sound). As you can see below, this Zestimate is very close to that of House #1, but the Value Range is far wider (by almost $150 K).
Why is this? Simply, our Zestimate is a better predictor of market value in
King county than it is in Island county and we want you to be aware of that.
We understand that the precision of the Zestimate value implies its accuracy
and we want to let you know when we know that we could do better. You could
have also discovered this (relative accuracy) by reviewing our accuracy
table (see below) for both King County (73% within 10%) and Island
County (62% within 10%). We're committed to transparently reporting on our accuracy, so much so that
we do it for each and every house in our database. We're also committed to
getting better at it. All we ask of you is that you click through to the
house details to get the full picture.
Zillow provides a great tool if used properly. Remember, this is just an estimate. Make sure that you do your own homework before investing in any property. Due dilligence is always key. |
