What Will My Home Be Worth – The Zillow Crystal Ball
We often get asked questions about future value of homes by sellers and buyers
I don’t know about you, but my crystal ball doesn’t function very well and I’m loath to respond to an inquiry like this with any sort of definitive answer. How about you?
But now we have a solution – blame it on Zillow.
Zillow has rolled out a new offering that will, purportedly, estimate the future value of millions of homes around the country, a new evolution of the popular “Zestimate.”
This new tool, the Zestimate Forecast, is designed to predict the change in value over the next 12 months (% and $) using a range of housing (e.g., property tax rates, mortgage interest rates) and economic data (e.g., unemployment rates, population growth).
Innovative? No doubt!
Accurate? Probably not! But time will tell
Will consumers love it? I expect so, given the interest in Zestimates despite the accuracy issues vis-à-vis true market value.
Who doesn’t want to know the value of their home in the future?
But will this be one more Internet source of confusion for consumers about current, and future, market value?
I can see it as a listing presentation. Mr. and Mrs. Seller are thinking of selling to move up, but since Zillow “says our home will be worth 12% more in a year than the current value you are giving me, we think we are going to wait to capitalize on that.”
Hmmm, how about that potential home you might want to buy that will also be going up 12%?
And will buyers' purchase decisions be influenced by Zillow’s prediction of how much more the home they like might be worth in 12 months? Some will, no doubt.
Maybe I’m just pessimistic. Perhaps the Zillow crystal ball will work well. Time will tell. But then if it's wrong, it's too late, right?
[photo above reprinted with permission from KeepingCurrentMatters.com, a service I subscribe to]