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Asked by Elizabeth, Seattle, WA Thu Apr 26, 2012

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Gina Chirico, Agent, Fairfield, NJ
Fri Apr 27, 2012

If you are basing your opinion that homes are overpriced based solely on Trulia and Zillow's home value estimates than you are not basing your decision on the proper data. A local real estate agent can provide you with the most recent sold comps in that neighborhood and that will determine what the market value of homes are in that neighborhood. Of course sellers can list their home for whatever price they want and that doesn't mean the home is worth that however a buyer's comparative market analysis showing what homes recently sold for in that neighborhood determines what the house is worth to a buyer - its the price the buyer is willing to pay.

Not to mention that a local real estate agent not only has the stats (as may Trulia and Zillow), as local agent knows the neighborhood and the homes in the neighborhood, what their condition was, if it was a short sale, bank owned home, etc. The numbers don't lie however sometimes a house has its own story and that story will reflect in the sales price.

With all that being said, you state above that homes are being sold $50-90k over their estimated home values on Zillow and Trulia than that should tell you that Zillow and Trulia's estimated home values is not accurate.
1 vote
Corey Grushin, Agent, East Brunswick, NJ
Fri Apr 27, 2012
Elizabeth don't believe all the estimates you read on Trulia & Zillow. A lot of times if the number of sales in a particaliar area is minimal Zillow is going to use the tax accessed value for an estimated price, but the tax accessed value is rarely what the sales cvalue would be. If you want to know what a good price for the home would be, look up the sales prices of homes in the neighborhood were in 2002 - 2003. That woul dbe a good indicator of what the current sales prices should be in most neighborhoods.
1 vote
J, Agent, Greensboro, NC
Fri Apr 27, 2012
Assumption, perception of housing values based on random websites have been a thorn in the side of many RE professionals. Absolutely nobody knows your local market better than an experienced local agent. Zillow was created by a broker located in Texas and the information provided was more than likely obtained through public record information.

You need facts related to sales in varies locations and a good agent can provide you the facts free of charge. Good luck to you!
0 votes
Tina Lam, Agent, San Jose, CA
Fri Apr 27, 2012
Trulia and Zillow estimates are trailing indicators, extrapolating prices based on sales histories from 4-6 months ago. When prices were going up, as during the peak of the last bubble, they far over-estimated the market price. Then, when home prices are recovering, as they are now, their estimates are usually too low for the market.

The housing market is normalizing at the moment. There's still relatively tight credit so a housing bubble is not possible. Prices are being driven up by cash buyers, which are the most conservative/value buyers. So, until credit really loosen up, we won't see the real spike up in prices.

A house's price is based on what people are willing to pay. If other people are willing to pay more, that's what it's worth. Your personal opinion on price would have an impact only if there were no other buyers.
Web Reference:
0 votes
Suzanne MacD…, Agent, Succasunna, NJ
Fri Apr 27, 2012
Hi Elizabeth,

I do not think a bubble is occurring. You cannot rely too heavily on Zillow and Trulia estimates of value. First of all, in this market, you need compa-rable sales data that is up to the minute current. Second of all, some sites, Zillow in particular, rely on price per square foot to do their calculations and we just don't use that here in New Jersey. Trulia and Zillow may be a good rule of thumb but for cutting edge accurate data you need to talk to a realtor. Also, home values have nothing to do with the age of the home. If the homes have been well maintained and updated their value has gone up and down just like everyone else's home values.

I would recommend you talk to a local realtor who is familiar with the market there in Somerset. The realtor will help you look at recent sales in the neighborhood in question to see what homes are actually selling for today. Then you will have a far more accurate idea of what the kind of home you are looking for will actually cost and you can go from there. You might also want to consider purchasing a short sale since those homes can usually be gotten at a discount. It takes longer and it can be a frustrating process, but if you are patient and follow the advice of your realtor you may be able to purcahse the home of your dreams at a very, very good price.
0 votes
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