Berk You Zillow

I calculate my net worth almost every business day.

I know that some caution against doing this as it can lead to overreaction to short term market fluctuations but I don’t have that problem and I find doing the calculation to be a big motivator. Basically, I don’t have an airplane or sailboat to play with, instead, I play with my portfolio.

Anyway, I need to include the equity in my home to know what I’m worth and I’ve used Zillow for many years to do this. Is Zillow spot on accurate, hell no, but what is the alternative; spend several hours a day doing my own comp?

BTW, I’ve been documenting the Zillow estimates of homes in my area that I knew were about to go on the market and then comparing the closing prices later to assess Zillow’s accuracy and it’s generally been pretty good (say one standard deviation being ~4% meaning 67% of the time, the delta would be within +/- 4%) and there hasn’t seemed to be a bias where they consistently estimated over or under the closing price…bottom line, Zillow has been a free, easy, and independent way for me to plug a reasonable number in.

Well, on October 25th, Zillow estimated my home to be worth 890K and on October 26th, they dropped it to 812K…are you Berking kidding me, a 78K (8.76%) drop in one day and absolutely nothing changed in my area…no kryptonite found in the ground water, etc. My parents have a home three miles away from me and Zillow dropped them from 1.325M to 1.05M at the same time…let me save you the trouble of doing the math…that’s 275K (20.75%!!!)…Berk you you Berking Berktards.

Zillow provides a run chart showing their estimate of a home’s value over time and their charts have magically been revised to eliminate the drop, in other words, they’re denying they made a huge revision…that’s just dishonest.

Anyway, I’ve been concerned that Zillow was jumping the shark for a while as they’ve adding features like “tell us what improvements you’ve made so we can better assess your home’s value”….give me a break, like they’re sufficiently staffed to look at millions of pictures and what would stop anyone from just posting pictures from designer homes.

I’m wondering if they’re positioning themselves to start charging extortion, ops, I mean membership fees…pay us or else we’ll say your home isn’t worth E36 M3.

Could this have something to do with traditional realtors now competing with discount, partially automated real estate models?

Has anyone else noticed Zillow making a massive change to home values in your area?

Yep, trying to sell my house and it has had damn near a 10 percent drop since we started listing several months ago. The area isn't declining in value but Zillow certainly thinks our home is.

I calculate my net worth almost every business day. I know that some caution against doing this as it can lead to overreaction to short term market fluctuations but I don’t have that problem and I find doing the calculation to be a big motivator. Basically, I don’t have an airplane or sailboat to play with, instead, I play with my portfolio.

See, now you're the kind of person who would be dangerous as a CEO...seriously. But you're a stats professor so it's cool

Anyway, don't get so upset that some rinky-dink algorithm thinks your home is suddenly worth less than yesterday. It means practically nothing. Google thinks my (personal) business email belongs to a backwoods militiaman for cryin' out loud

I don't know anyone who actually uses that data, nor considers it accurate.

Holy tar man take a step back, even I only re-balance vanguard and check NW every 6 months or so and I am coocoo banana's

RX Reven' wrote: Basically, I don’t have an airplane or sailboat to play with, instead, I play with my portfolio.

Might be time to look into that airplane or sailboat. Anything that might provide you some relaxation and enjoyment.

Zillow is one very very small step away from useless. They have our house valued below several on the same street even though it's been updated more and has better fixtures etc. I've called on several potential rental properties I've found on there that have a)Sold already, b) the price is zero reflection of the actual asking price c)House that have never been for sale. I don't know what their feed is, I assumed it was from MLS, but it's for crap.

Zillow is this useless

Never even cared to look but reading this thread got my curiosity up so I looked up my house on Zillow and it's right in the ballpark. Still 20% less than I paid for it 11 years ago though, uuuuuggggh, why did I look? I knew what it was, really didn't need a reminder.

wearymicrobe wrote: Holy tar man take a step back, even I only re-balance vanguard and check NW every 6 months or so and I am coocoo banana's

Agreed. Calculating networth daily is insane, and probably doing you more harm than good. Especially when the next downturn hits and you watch it march downwards for 30+ days straight. For your own health and sanity I'd recommend another hobby.

I do a rough account balance update once a month, and a proper one annually.

This is kind of like going on a diet and then weighing yourself hourly.

BTW, don't even trust official valuations on houses, the selling price is the only real measure. We had our house valued for a re-fi in late spring 14. We had it done again for various reasons in early 16, just under two years later. We even had the same woman come and do the valuation. The area has been going up at 10-15% a year and she valued it down the line for $5K less than the first time. Now, we thought it was a generous value first time, and obviously low second time, but WTF? It didn't matter for what we needed, but I don't trust any valuation except the selling price these days.

According to Zillow, my house and property is value at $125k. 3 times what was paid for it in 1987 when purchased, which is good. According to land values on my street from recent sales, the acreage alone is worth upwards of $200k if I were to sell today.

This property will be sold as 2 acres with a building when the time comes, as there is no way in hell, short of tearing down to the slab, to get this house to ever pass a code inspection, so maybe Zillow isn't where I should be checking afterall.

But I added all that to say that an algorithm and traffic generating website really shouldn't be taken too seriously.

Heck, according to NADA and KBB, my Jeep is only worth $4500. Being 10 years old, 60k on the clock, and rust free, I wouldn't have a problem selling it for $10k any day of the week around here, but take it 8 hours south and the price would plummit.

I just changed Zillow to show that my house has 5 bedrooms(it don't). so... who cares.

Hey, I'm up almost 2% from the last time I check about a month ago.

Some of the key data that feeds Zillow's pricing algorithm is published on a quarterly basis, or even an annual basis--and that can cause notable fluctuation in the derived output for a specific property. Blame your county records department, your state tax office, the IRS, the National Association of Realtors, et al. If you want you want a more stable value, write your own algorithm

.......first world problems.........

One time about five years ago I calculated my net worth. It was negative. I may calculated it again in five more years but I doubt it'll be any different.

HappyAndy wrote: .......first world problems.........

Very much so. If I want to calculate my net worth, all I have to do is run a balance check at the ATM, look in my wallet, add up the value of my cars, and add up the value of my electronics Some of my friends don't even have to do all those steps

I've also seen the issue where the prices drop, but the history of the home's estimate doesn't reflect the sudden drop. This was especially true when real estate tanked, I had screen prints of Zestimates pre-crash that were far higher than they were willing to admit to post-crash.

I think the algorithm is heavily skewed towards recent purchases in the area, which makes sense, but can have a large impact on results. There's also no factor for the condition of the house, so I look at it as a rough estimate of the general trend in the area.

Maybe you'd be able to find a realtor who'd come out every day to give you an updated value

I suggest you get a sailboat. Or maybe an airplane.

The financial value of a home is what you sell it for. Unless you're planning on selling in the immediate future, this value is irrelvant - its real value is as your home. In either case, what Zillow's proprietary algorithm thinks your house is worth adds no value to your life.

JohnRW1621 wrote:

RX Reven' wrote: Basically, I don’t have an airplane or sailboat to play with, instead, I play with my portfolio.

Might be time to look into that airplane or sailboat. Anything that might provide you some relaxation and enjoyment.

What this guy said!

In my area Zillow has actually been pretty dang accurate. I suspect it depends on the volume of sales and comparable homes around town. Here in Florida the market is red hot and the homes are so cookie cutter that the only difference between one house and the next is the house numbers and the height of the grass (assuming the two owners don't use the same lawn service).

How are you calculating net worth? Hopefully you're using Personal Capital and not manually calculating this.

Disclaimer - I only check my networth when I'm pissed off at work and I want to see how long until retirement. I usually follow it up by checking the GRM Forums.

Disclaimer V2 - Work pissed me off today and here I am. Also just signed off of Personal Capital.

nderwater wrote: Some of the key data that feeds Zillow's pricing algorithm is published on a quarterly basis, or even an annual basis--and that can cause notable fluctuation in the derived output for a specific property. Blame your county records department, your state tax office, the IRS, the National Association of Realtors, et al. If you want you want a more stable value, write your own algorithm

Several years ago, I researched how Zillow constructs and maintains the regression models they use to produce their estimates.

As some know, I teach engineering statistics for a living and I was satisfied with their methodology…Mallow’s CP statistic as a measure of multicollinearity (BTW, my daughter Hannah has been able to correctly pronounce multicollinearity since she was six – did some dust just get in my eye)…Pearson’s Correlational Coefficient…blah, blah, blah, basically, advanced statistical techniques used to capture as much of the observed variation as possible without over fitting the model.

Additionally, I’ve owned four homes in my area (Ventura County) over the course of 32 years…I know the area well, absolutely no surprises have occurred what-so-ever so regardless if the raw data is being drawn monthly, quarterly, or annually, nothing could come close to explaining the massive adjustment Zillow made in October.

I’m very suspicious that they are monkeying with their estimates for some nefarious purpose.

When I get a chance, I’m going to sneak in the back door at Zillow and talk to some of their statisticians to see what I can find out.

Zillow, you may have just grabbed the tiger by the tail.

RX Reven' wrote: I’m very suspicious that they are monkeying with their estimates for some nefarious purpose.

What nefarious purpose, though? Like others have said, their values are so close to useless, what does it matter if they change? What goal can they accomplish? They probably just made some change to their methodology for some reason.

The real question is why do you care so much?