Have you ever perused Zillow for Grandview Lake homes for sale and noticed that nearly all of the Zestimates are much lower than the listing prices? The Zillow Zestimate is a data point that has become a source of confusion, false pretense, and general misunderstanding in our niche market of Grandview Lake real estate. As both a Grandview Lake resident and real estate specialist, I’ll explain why the Zestimate and other AVMs can be an unreliable tool for buyers and sellers when evaluating property values on Grandview Lake.
The Zestimate is Zillow’s proprietary automated value method, or AVM. AVMs are basically a giant math equation, or algorithm. The algorithm is designed to make adjustments and calculations based on data points like SF, lot size, year built, and past sales. This complex mathematical equation is secret and non-transparent to those who seek to learn how the equation actually calculates a given home’s Zestimate.
Zillow claims that its “algorithm’s accuracy is within 4.3 percent nationwide, meaning half of Zestimates nationwide were within 4.3 percent of the final selling price, and half are off by more than 4.3 percent.” You can put Grandview Lake in the latter category, for the following reasons:
The problem with AVMs on Grandview Lake is that there are so many property features & intangibles that Zillow can’t possibly know based on electronic data points. For example, Zillow’s AVM has no idea if a home has an elaborate boat house, whether or not the dock is made of wood or trex, or if there’s a second kitchen in the home. Zillow’s AVM also has no judgement of value based on whether a home is located in the 7th addition cove, or whether it is located on the main body of the lake. Zillow doesn’t know whether the water is deep or shallow, whether the driveway is steep, or if the neighbor’s boat house is blocking the view. Unless a home has undergone a major structural remodel adding SF, Zillow doesn’t know to make adjustments for renovations. So maybe you spent $100,000 renovating all your bathrooms and kitchen – Zillow has no ability to quantify that. Zillow can’t capture value in things like a new roof, new furnace, panoramic view vs. no view… there are many more examples, but you can understand the implications of these lake home features that aren’t quantified in black and white data points.
The AVM method works well in neighborhoods like nearby Shadow Creek Farms, where all the homes are built on similar lots by the same builder, with just a few varying floor plans and selections. But on Grandview Lake – just cast the AVM data aside, as it’s most likely incapable of accuracy. Instead, talk to your local agent who is immersed in the market both as a Grandview Lake resident, and as a real estate specialist;)
Lora Brumett, RE/MAX Ability Plus firstname.lastname@example.org
Howell, David. “How accurate is Zillow’s Zestimate? Not very, says one Washington-area agent.” The Washington Post 6/10/14
Fontinelle, Amy. “Zillow Zestimates: Not as Accurate as you Think.” Investopedia 9/15/17
Harney, Kenneth R. “Zillow faces lawsuit over ‘Zestimate’ tool that calculates a house’s worth.” The Washington Post 5/10/17