Zillow vs The Coyle Group, Part IV
It’s been a pretty busy 2015 and I really haven’t had much time to blog. However, this is probably my favorite post to write each year. Since 2011, we’ve had a little contest between Zillow and The Coyle Group (see prior years). We randomly select a number of appraisals recently completed by our office and see how our appraisal values match up against Zillow’s Zestimates. This year we chose 16 properties across Philadelphia, Montgomery County, Bucks County, Delaware County and Chester County. Housing styles ranged from Roxborough rows to Center City condos flats to Main Line mansions.
Below is a chart of the results. The first column shows where the property is located, the second The Coyle Group’s appraised value and the third Zillow’s Zestimate. The last column shows how high or low Zillow was relative to our appraised values.
Once again, the results are pretty astonishing. Now, Zillow was pretty accurate on the Ambler Golf Community home; and the Merion Station Tudor was right on target. I’ll even concede that the Center City Condo was in range as well. But when Zillow is off, it tends to be way off! For instance, with the Parkwood Row in Northeast Philly, Zillow understated the value by 34.62%. That’s a big miss considering how “data rich” the Northeast is. Also, it just so happens that this property is currently active for $190,000. Zillow missed that little fact. This is where having a human being analyze the market data is so important.
Another interesting example is the Wyndmoor Colonial. This property was over valued by more than 22%. You see, what Zillow didn’t know was that this property was in original condition. Original kitchen, baths, fixtures, shag carpeting, wallpaper, etc. It was like stepping back into the 1960’s. Again, this is where having a certified appraiser physically inspect the property really matters. Algorithms don’t differentiate between “Brady Bunch chic” and a knocked-out kitchen with granite and high-end stainless appliances.
It just so happened that only four of the sample properties were under stated by Zillow. Granted, is a very small sample but, on average the Zestimates were under the appraised value by 22.98%. This is important to consider. If you are a homeowner selling your property and relied on a Zestimate to price your home, you could potentially under-price your house and leave some serious money on the table.
The other twelve value samples are all over-stated by an average of 8.83%. As a seller, if you over price your home in a competitive market, buyers will pass you by in favor of more competitively priced homes. Eventually, you’ll probably have to lower your price and run the risk of losing buyers that may have otherwise been very interested in your home.
Philadelphia and the surrounding markets are so nuanced that computers and algorithms can’t accurately take into account all of the individual market factors. For instance, things like specific location can’t be accounted for by Zillow. If your home is next to a garbage dump Zillow will look at it the same as if it were next to a park. As pointed out above, Zillow also has trouble factoring condition and updates into their Zestimates, as well. As of right now, there is no technology that beats having a knowledgeable appraiser to determine an accurate value on a property. Granted, the technology is getting better, quickly but it’s still not as reliable.
Don’t get me wrong, Zillow has it’s place. It’s great for gathering information on neighborhoods and general market trends. It’s comparative tools and graphs are very useful. Zillow is a good place to start. However, in the end, Zillow’s Zestimates are not appraisals at all and should not be relied on as such. If you need assistance in pricing a property, I suggest getting some input from a from a good local agent or a certified appraiser and passing on Zillow.
The Coyle Group’s team of Philadelphia appraisers are a leading provider of appraisals for Estate/Probate, Divorce, Bankruptcy, Tax Appeal and Pre-Listing. If you need a guest speaker at your next sales meeting, please give us a call. We would welcome to opportunity to speak to your group and field any appraisal related questions you may have. For more information please visit our website at www.TheCoyleGroupLLC.com You can also contact The Coyle Group at 215-836-5500 or firstname.lastname@example.org