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!