Zillow vs Appraiser Part IV

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.

The Coyle Group - Zillow 2015

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 appraisals@coyleappraisals.com

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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

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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