How Accurate is a Zillow Zestimate?

Zillow estimates are reached by using an algorithm: it  is a computer generated system.  So, if you were in say a nice tight community with similar lot size and characteristics and there are 1000 homes in this area then it is more accurate as  the computer looks at past sales and generates an average.

When dealing with custom homes on custom lots it is just  not accurate.  For instance one home may have a country club attached to it, a living guard at the gate with very few sales in that immediate area…..but 1 mile down the road in a non-hoa, no gate, and completely different home a home sells….Zillow now brings that into its zestimate.

Homes in higher price ranges, luxury homes over $1M, have a smaller pool of buyers and will sit on the market for longer periods of time certainly in comparison to the under $500K homes…..but Zillow doesn’t differentiate the home itself : condition, year,  updates, appliances landscaping, just the sales and sales activity around it …and most recent.
It really does mess with the valuation of property when you are considering making an offer or listing your home based on Zillow.

When you get into cave creek area (stagecoach) for example, there is such variation in property….like Arcadia.  You can have 1 million and down the road 5M and across from that 850K.
Neighbourhoods sell in a range up to approximately 20% – not what Zillow may suggest.  The best way to figure out the value of a home is to look at similar area, similar home (or at least caliber of home in custom builds) the recent sales in a recent time frame in relation to the type of home you are comping –

Want to know the value of a home you found on Zillow and compare what I come up with vs Zillow?  Send me an email and I will get back to you!

Phoenix Current Market Conditions

Hand imageRight now we are pretty much in a balanced market – today 23,732 homes actively on the market- which is just under 3 months inventory, closer to 4 – we move around 8000/month phx wide.
when we get to about 7 months inventory we could anticipate prices to drop- less than 3 months prices tend to be on the rise and 4-6 is balanced: nothing really exciting, hence the media always trying to come up with a story…..:)

There is a divergence in the inventory that is worth noting – if it is a “fixer upper” it is more of a buyers market. This inventory seems to be sticking around longer; the demand for these is far less than the coveted “updated” homes. These are in higher demand and don’t stick around as long, certainly not if they have it priced right. Pulling accurate comps is crucial here – neighbourhoods sell in a range and it is so important to know what has sold in the area as recently as possible…..

Changes in the Market

This is the post back in January 2013:

http://stacyinscottsdale.com/2013/01/supply-and-demand-2013/

Here we are in September 2013:

http://stacyinscottsdale.com/2013/09/supply-and-demand-in-september-2013/

And today…..

text_index_nov_13

Typically, we do see a drop in listing activity due to the holidays but it is important to pay attention to the “trend”   The market index has been on a decline has finally hit a point that can be deemed a buyers market.  I will continue to update you on inventory: supply and demand and if you would like to receive some listings from me, don’t hesitate to contact me!

Sliding into a Buyers market in Scottsdale!

Arabian Library ArtAs of October 27, 2103 we have entered what is referred to as a “balanced market”

As inventory continues to rise and sales slow we are moving rather quickly into a “buyers market”.  It was only back in the spring that inventory was so low that sellers were able to sit back and entertain multiple offers while buyers scurried around with their agents, cheques in hand hoping to get a chance to make an offer…

Not the case now!  Buyers will have more power to negotiate, shop around with more inventory from which to choose. Inventory is up 31% since July!

Sellers are in the early stages of realizing that even though prices are still showing a marginal increase the inventory is not moving as quickly as it was.  Last year at this time, your home if listed had a 95% chance of selling, today only 75%  – keep in mind that 80% is considered normal-

So, in case I didn’t say it loud enough:  We are in a buyers market!!

 

 

 

 

Supply and Demand: Effects on Pricing

Currently we have 19,847 active, normal listings valley wide here in AZ.  This is about 2.8 months inventory.  We know and have previously looked at that supply and its effects on pricing: Remember 3-5 months inventory would suggest prices are stable.

It is also important to realize that a slow in demand does not mean prices won’t rise overall, annually.  We can expect to see about a 5% increase in prices per year with as many as 30,000 active listings!

For you as a buyer, it is a comfortable place to be.  The multiple offer “frenzy” is not as frenzied and buying will be a little easier!