Zillow vs The Coyle Group Part III

The Coyle Group vs Zillow Part III

It’s that time again for the annual match up between Zillow and The Coyle Group.  This year we randomly selected 25 appraisals completed by our office with in the past 3 months.  The appraisals were of properties across Philadelphia, Montgomery County, Bucks County, Delaware County and Chester County.  Housing styles ranged from simple South Philly row homes to Center City condos (you’re welcome Mark) 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.

Property

 Appraisal

 

 Zillow Zestimate

Difference

Rittenhouse Square Townhse  $    990,000.00    $     954,000.00

3.63%

Chestnut Hill Twin  $    285,000.00    $     329,000.00

15.43%

Ambler Colonial  $    570,000.00    $     396,000.00

54.47%

Burholme Twin  $    125,000.00    $     138,000.00

10.40%

Media Split Level  $    325,000.00    $     251,000.00

29.48%

Mount Airy Twin  $    310,000.00    $     259,000.00

9.69%

Northeast Philly Row  $    171,000.00    $     172,000.00

0.58%

Hatboro Split Level  $    225,000.00    $     244,000.00

8.44%

Gladwyne Colonial  $    600,000.00    $     758,000.00

26.33%

Society Hill Townhouse 1  $    875,000.00    $     848,000.00

3.18%

Conshohocken Single  $    190,000.00    $     252,000.00

32.63%

Flourtown Colonial  $    735,000.00    $     698,000.00

5.30%

West Chester Colonial  $  1,300,000.00    $  1,000,000.00

30.00%

Society Hill Townhouse 2  $  2,100,000.00    $     922,000.00

127.76%

Chestnut Hill Colonial  $    975,000.00    $     857,000.00

13.77%

Bryn Mawr Colonial  $    770,000.00    $     750,000.00

2.67%

Havertown Cape Cod  $    295,000.00    $     286,000.00

3.14%

South Philly Row  $    186,000.00    $     151,000.00

23.17%

Doylestown Colonial  $    395,000.00    $     337,000.00

17.21%

Villanova Tudor  $  1,550,000.00    $  1,430,000.00

8.39%

Roxborough Row  $    240,000.00    $     210,000.00

14.20%

Warrington Colonial  $    435,000.00    $     378,000.00

13.10%

Condo – The Philadelphian  $    675,000.00    $     634,000.00

6.07%

Condo – Queen Village  $    180,000.00    $     183,000.00

1.63%

Lafayette Hill Colonial  $    325,000.00    $     275,000.00

15.38%

 

The results are pretty amazing.  In a few comparisons, Zillow was right on target.  For instance, I would say that they were spot-on with the Northeast Philly Row and the Queen Village Condo.  They were fairly close with number of others including the Rittenhouse Square Townhouse, Society Hill Townhouse 1, the Bryn Mawr Colonial and Havertown Cape.

However, Zillow completely whiffed on a number of others, most notably the Society Hill Townhouse 2.  Zillow wasn’t even close.  The Zestimate missed the mark by more than 127%.  That’s crazy considering there was a recorded sale of this property in 2013 for $1.85M.  This is where having a human being analyze the market data is so crucial.  All the fancy algorithms and computer models overlooked the simple fact that this property sold only months ago for twice the Zestimate amount.  We appraised the property a couple months after the sale and following a renovation of the kitchen and baths.

On average, including the Society Hill 2 property, the Zillow Zestimate was 23.42% lower than the appraised value.  Excluding the Society Hill 2 property, Zillow was still off by 16.47%.  When Zillow over-Zestimated they did so by 11.25%, on average.  These are some significant numbers.  If you were selling and used a Zestimate to potentially under-price your house, you could be leaving huge sums of money on the table.  If you overpriced, the market would likely pass you by in favor of more competitively priced homes.  Eventually, you would have to reduce your price and by that time many of the interested buyers will have moved on.

Philadelphia and the surrounding counties are such a patchwork of real estate markets that computers and algorithms can’t possibly take into account the individual nuances.  Zillow doesn’t take into consideration if there’s a vacant house next to your property or a golf course.  Zillow looks at them as being the same. That’s why having a knowledgeable appraiser to physically inspect the property is so important to realizing a correct value.  Nothing (so far) beats having a live human being appraising your property.

Bottom line, Zillow is not all bad.  It is not an appraisal but it is a good place to start.  The neighborhood data, general sales information, graphs and comparative tools are great and very user-friendly.  However, if you are looking to properly price your home, I would pass Zillow by and get some advice from a good local agent or a certified appraiser.

The Coyle Group’s team of Philadelphia appraisers are a leading provider of appraisals for Estate/Probate, Divorce, Bankruptcy, Tax Appeal and Pre-Listing appraisals.  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 appraisals@coyleappraisals.com

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Zillow vs Appraiser 2013

 Zillow vs TCG

“Zillow told me that my home is worth…”

Appraisers across the USA hear those words at least once a week from well-meaning homeowners.  What many homeowners don’t realize is that Zillow, while a very useful tool, is not always the best indicator of the actual value of their home.  A Zillow Zestimate is not an appraisal.  In fact, if homeowners use Zillow to help them price their home for sale, they could be leaving thousands of dollars on the table, as we will show you.

Below is a chart of 18 randomly selected appraisals that The Coyle Group completed in the past 3 months.  The houses are located throughout Philadelphia, Montgomery, Bucks, Delaware and Chester County.  The chart is a comparison of our appraised value and the Zestimates produced by Zillow.  Keep in mind that our appraisals have the benefit of a full property inspection by a human being and nuanced market knowledge.   Zillow’s Zestimates rely on public records, complex algorithms and no physical inspection of the property.  Here are the results: 

Maple Glen Colonial Appraisal: $430,000 Zillow: $351,050

22.48%

Conshohocken Single Appraisal: $370,000 Zillow: $329,924

12.14%

Collegeville Cape Cod Appraisal: $364,000 Zillow: $355,012

8.65%

Bryn Mawr Mansion Appraisal: $2,000,000 Zillow: $1,662,317

20.32%

Lafayette Hill Colonial Appraisal: $550,000 Zillow: $470,806

16.82%

Chestnut Hill Colonial Appraisal: $635,000 Zillow: $686,018

7.44%

Gladwyne Cape Cod Appraisal: $745,000 Zillow: $697,428

6.82%

Condo – The Murano Appraisal: $575,000 Zillow: $458,870

25.30%

Art Museum Condo Appraisal: $280,000 Zillow: $257,852

8.59%

Condo – The Dorchester Appraisal: $345,000 Zillow: $339,499

1.62%

South Philly Row Appraisal: $110,000 Zillow: $157,378

30.10%

Berwyn Colonial 1 Appraisal: $750,000 Zillow: $886,168

15.37%

Berwyn Colonial 2 Appraisal: $1,200,000 Zillow: $1,153,633

4.02%

Doylestown Townhouse Appraisal: $325,000 Zillow: $294,410

10.39%

Fishtown Row Appraisal: $225,000 Zillow: $211,700

6.28%

Villanova Mansion Appraisal: $2,450,000 Zillow: $2,544,935

3.73%

Mount Airy Twin Appraisal: $285,000 Zillow: $324,137

12.07%

Roxborough Row Appraisal: $245,000 Zillow: $235,076

4.22%

As you can see there are some pretty dramatic deviations between Zestimates and the appraisals.  Based on our appraised values Zillow under valued 13 of the properties.  In some instances Zillow was almost right on, take for instance the condo in The Dorchester.  They were only off by 1.62%…that’s pretty good if you ask me.  For the condo at The Murano, they were off by more than 25%…waaaay off!  On average, Zillow under-valued the properties by 12.39%.

In the case of the South Philly row, the Zestimate was over by more than 30%.  However, I can’t fault Zillow on this one.  The property was really dated and needed a great deal of work.  But this does illustrate how having a full interior inspection of a property can lead to more accurate values.  Also, the Mount Airy twin was over-valued by 12%…but this doesn’t surprise me, everyone in Mount Airy thinks their home is worth more than it is.  Just kidding.

Now imagine that you’re a homeowner getting ready to sell.  You hop on your computer, plug-in your address and Zillow says your home is worth $300,000.  Based on our findings, if Zillow under-values properties 12.39% on average, you (the homeowner) could potentially be leaving $37,170 on the table.  That’s serious money!

This illustration underscores the importance of consulting with a knowledgeable real estate agent or Certified Real Estate Appraiser.  Getting a Pre-Listing Appraisal prior to putting your home up for sale and knowing the true market value of your home can save you time, money and effort when it comes to selling. 

As for Zillow, keep in mind that it is a tool…a starting point.  It’s great for neighborhood data, graphs, general sales information or for seeing what your new neighbors paid for their house.  It’s probably not the best place if you’re looking for assistance with making definitive decision or properly pricing your home for sale.

If you want to know more about our Pre-Listing Appraisal services or have any real estate appraisal related questions please visit www.TheCoyleGroupLLC.com.  You may contact us directly at…215.836.5500 or appraisals@coyleappraisals.com

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If You Had $1,000,000

Each year I like to take a look at the area to see what $1,000,000 can buy you in Philadelphia and the surrounding suburbs.  Here’s what I found…

In Philadelphia, $1MM can get you this stylish, luxury Contemporary in Chestnut Hill with 5 bedrooms, 4.5 baths and 4,336 SqFt of living space.  It also gets you a location on corner of Germantown Avenue, not very private.

 

 

 

The search in Bucks County takes us to Buckingham Township, where for $1MM you can have this 5,364SqFt Colonial with 5 bedrooms, 5.5 baths, an in-ground pool, 3 car garage, finished walk-out basement on 2.39 acres.  Not bad!

 

 

 

The million dollar offerings in Delaware County took us to Haverford Township.  There, a cool million can get you this 100-year-old stone residence designed by Fred Bissinger.  It features 3 bedrooms, 2.5 baths, with 2,597SqFt of living space and an in-ground pool.

 

 

 

 In Montgomery County a $1MM can get you into this nice stone Cape situated on 2.24 acres on the Main Line, in Gladwyne.  The house boasts 4 bedrooms, 3.5 baths and approximately 4,369SF of living space.  You also get a three car detached garage and access to the award-winning Lower Merion schools.

 

 

 

 Chester County, offers the most bang for the buck by far!  If you want a little fixer upper you can grab this place in Chadds Ford, a 231 year old farmhouse on 14.9 acres that includes barns, stone walls, a pool and pond.  The main house had 4,539SF, 6 bedrooms and 4.5 baths.  There is also a 3 bedroom 2 bath guest house.  If you happen to have an additional $1.85MM laying around you can also buy the adjacent 56 acre parcel for a little more privacy!

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Zillow vs Appraiser

It seems that Zillow is every nervous homeowner’s best friend (and in some cases their worst enemy). Hardly a week goes by that I don’t hear “Zillow told me my home is worth (fill in the blank).” 

The Zestimates that homeowners often present to appraisers can produce some interesting (and misleading) results.  So much so, that I thought we could do a comparison of 12 randomly selected appraisals that were completed by our office and match them up against their Zillow Zestimates.  Keep in mind that the appraisals have the benefit of a full property inspection by a human being.   Zillow uses public records and complex algorithms.  Here are the results. 

Lafayette Hill house Appraisal: $600,000 Zillow: $529,000

(-11.83%)

Oreland house Appraisal: $230,000 Zillow: $209,500

(-9.78%)

Gladwyne house Appraisal: $585,000 Zillow: $633,500

7.66%

Roxboro twin Appraisal: $206,000 Zillow: $186,300

(-10.57%)

Conshohocken house Appraisal: $350,000 Zillow: $279,600

(-25.17%)

Blue Bell house Appraisal: $335,000 Zillow: $314,900

(-6.38%)

Chestnut Hill twin Appraisal: $300,000 Zillow: $334,200

10.23%

East Falls twin Appraisal: $411,000 Zillow: $427,100

3.77%

Center City condo Appraisal: $755,000 Zillow: $634,200

(-19.05%)

Penn Valley house Appraisal: $585,000 Zillow: $561,000

(-4.28%)

Rittenhouse Square townhouse Appraisal: $1,900,000 Zillow: $898,700

(-111.4%)

Chester Springs home Appraisal: $1,000,000 Zillow: $871,700

(-14.72%)

As you can see there are some pretty significant deviations between the appraised value and the Zillow Zestimate.  In one case, Zillow was off by more than 111% (this seems like a fluke) but, in other examples as close as 3.77% (not bad!).

Bottom line, Zillow is a tool…a starting point.  It’s wonderful for neighborhood data, graphs and general sales information.  It’s probably not the best place if you’re looking for assistance with making definitive decision.

If you have any real estate appraisal related questions, please feel free to contact us…215.836.5500 or appraisals@coyleappraisals.com

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Price vs Value

I was invited to speak at the monthly meeting of local Caldwell Banker Agents and Brokers. I was there to discuss the appraisal process, recent market trends and how the HVCC is affecting agents and their clients.

After speaking, I opened up the floor to questions. One of the first questions was a great one. The agent asked me to explain the difference between Price and Value. I’ve been thinking about it and have come up with the following explanation.

When viewed against the backdrop of recent marketplaces shifts both locally and nationally over the past few years, the difference between Price and Value has become more and more important to understand. In fact, I feel that most Agents and their clients are using the terms incorrectly.

When discussing a property most Agents and their clients are thinking in terms of price. “What is the price of the house”, “will they come down in price”, “that price is high/low” and my favorite “did the appraisal come in at the selling price?” The fundamental problem in these scenarios is that it is not about price, it’s about value. The focus should be on what the value of the home is, not the price. Value takes into consideration today’s market and underlying market conditions. Price often does not.

Price is a marketing tool. By setting a price, the Seller is actually choosing a segment buyers who will hopefully see the price as being the value of the property. The closer the Seller positions the price to the true value of the property, the larger the pool of potential Buyers the house will appeal to. Just the opposite is true, as well. The further the price is placed from the actual value of a property, the smaller the pool of buyers who will see that value.

An example of this was this property in Gladwyne. This property was listed in 2009 for $19,500,000. It was eventually withdrawn from the market. In 2010, it was re-listed for $17,900,000. All totaled, the house sat on the market for more that 660 days.

This is a situation where the Seller priced the house so far above the perceived value placed on it by the market, that they effectively diminished the pool of potential buyers to zero. This market did not support the price that was being asked

Remember value is guided by the market. Price is guided by the individual Selling the property. If the price is not supported by the market, no sale will occur.

Common perception is that price and value are interchangable. They are not. Value relates to what something is really worth.  That is, what could one expect to receive in terms of money in the free market?  It doesn’t matter what the value was last year, last month, or even last week. Value is determined by the conditions and influences of the current marketplace. Too often, sellers get hung up on that fact when the marketplace moves in the other direction. They don’t want to acknowledge the fact that their home was worth $800,000 a year ago and, based on supply and demand, is only worth $700,000 in today’s market. Value is determined by the scarcity of something and the ease of replacement with similar, equal, or better products or service (i.e. The Principle of Substitution).  In its most basic form, this is a simple function of supply and demand.

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