What Will My Home Be Worth – The Zillow Crystal Ball

By
Real Estate Agent with Solutions Real Estate CA DRE #01490977

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.

 

Can Zillow REALLY predict future value?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?

 

What will my home be worth in the future?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?

 

Any thoughts?

 

[photo above reprinted with permission from KeepingCurrentMatters.com, a service I subscribe to]

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Rainmaker
1,016,136
Tim Lorenz
TIM LORENZ - Elite Home Sales Team - Mission Viejo, CA
949 874-2247

Yikes we have to deal with bad Zestimates and now future value.  They have a lot of nerve.

Jun 29, 2014 02:33 AM #1
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Noah Seidenberg
Coldwell Banker - Evanston, IL
Chicagoland and Suburbs (800) 858-7917

Jeff, I really do not like Zillow. I could go on and on about how their lying inside sales people will tell you anything for a promise of exclusive rights to a zip code in your area and then when nothing happens they say they were only providing advertising. The thing that really pisses me off about A, T, and R is that they always come up first on the searches no. I don't know if I am more angry at them or Google?

Jun 29, 2014 02:42 AM #2
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Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude

Tim - we will have more explaining and coaching to do with buyers and sellers

Noah - I get that. Probably nothing to be done about it as they are too big

Jeff

Jun 29, 2014 04:20 AM #3
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William Johnson
Retired - La Jolla, CA
Retired Real Estate Professional

Hi Jeff, 

It is not about if this works or not. It is less important than the objective. What is the objective? Selling more leads that ultimately makes Zillow indispensible to the agents that buy them. 

 

Jun 29, 2014 06:10 AM #4
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William Johnson
Retired - La Jolla, CA
Retired Real Estate Professional

I should have included in my comment that Zillow correctly understands consumers interest of knowing things without nessessarily giving up their information, but eventually they get it because they inspire the what ifs. Besides, the name itself is easy to remember and they get lots of advertisng dollars to attract more and more of the public that is thinking about their home value. See Kathy Stebs post today and the first post she featured addressed this very subject. 

Jun 29, 2014 06:22 AM #5
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William Johnson
Retired - La Jolla, CA
Retired Real Estate Professional

I also meant to add Jeff that I suggested this post as it will inspire many opinions and comments. Great topic!

Jun 29, 2014 06:24 AM #6
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Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude

William - you certainly raise a valid point and advertising dollars speak loudly. I do think it will afford us the opportunity to engage in more discussion wtih buyers and sellers about the impact of various factors on the market value of their homes.

Thanks for the suggest. It will be interesting to see what others have to say, pro and con

Jeff

Jun 29, 2014 06:53 AM #7
Rainmaker
1,163,012
Jane Peters
Home Jane Realty - Los Angeles, CA
Los Angeles real estate concierge services

In my mind this is just dangerous. No one can accurately predict the future market. I wasn't in the business for the crash, but what did Zillow predict a year before that?

Jun 29, 2014 09:01 AM #8
Rainer
1,300
Dis En Franchised

If zillow is crapping on your house value, return the favor - box up and anonymously send them some dog poop.  we shouldn't have to tell them everything about our homes to improve our value on their site.  Instead, if they get enough dog poop from a certain area code, they'll get the picture that their is something wrong with their model there...3

Jun 29, 2014 01:43 PM #9
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Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude

Jane - indeed. It will be interesting to follow

DEF - really? Why is it you don't want to identify yourself? Are you embarassed about the comment you made? How is this actually going to help anything?

Jeff

Jun 29, 2014 03:16 PM #10
Rainmaker
536,538
Mark Don McInnes, Sandpoint
Sandpoint, ID
North Idaho Real Estate - 208-255.6227

Zestimates tend to be off target on current market values.  Add 12 months on with more incorrect info.  This should be entertaining at the least.

Jun 29, 2014 04:21 PM #11
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Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude

Mark - one would think the accuracy WOULD be a challenege, given how hard it can be to predict future value anyhow. As I said to William, it's a good educational opportunity for us

Jeff

Jun 30, 2014 12:21 AM #12
Rainmaker
875,983
Janis Borgueta
Key Properties of the Hudson Valley - Newburgh, NY
LIC RE Salesperson

If it is written people think that someone else is monitoring the info and therefore worthy of their attention. Consumers also hate it when they get wrong information. Too late for the most part in that the consumer has been handed a bunch of wrong info on a daily basis and it has been served to them on a silver plater at our expense. We have to clean up the mess and educate consumers as to why the info is wrong in order to win  them over. Energy not well spent. The system has been broken.

Jul 08, 2014 12:32 PM #13
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