How are Zillow estimates calculated ?

Asked by John, Palatine, IL Tue Mar 24, 2009

I am looking at some houses in Palatine,IL and i see they have depreciated about 7-10 % within 30 days in their price based on Zillow estimate. example is

http://www.trulia.com/property/44114104-509-N-Easy-St-Palati…
http://www.zillow.com/homedetails/charts/3260486_zpid,5years…

This property was estimated 500k on Feb 25th and its 465k today.

Where as if i look at properties in nearby neighborhood the depreciation is in 2-3 % ranges in the last month.
How do they estimate the depreciations ? Why is Palatine depreciating fast ? Please someone explain.

Thanks
John

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3
John, Home Buyer, Palatine, IL
Wed Mar 25, 2009
Thanks Susan and Bill. It makes sense.
0 votes
Bill Eckler, Agent, Venice, FL
Tue Mar 24, 2009
John,

Don't lose any sleep over the information provided by Zillow in the form of Zestimates. You can do better by selecting the 3-4 homes most like yours and calculating the average price.

One of the problems with Zillow's Zestimates is they make little distinction between the homes in the general location and too often use homes as comps that should not be considered. If you can be objective and carefully select property that accurately reflect characteristics of your home you can arrive at numbers that may be close to those of an appraisal.

Don't waste your time trying to figure out how their numbers are arrived at.....use their credible information to arrive at your own numerical understanding.

Good luck
0 votes
Susan K Klatt, Agent, Palatine, IL
Tue Mar 24, 2009
I am a realtor serving Chicago's northwest suburbs and I do not rely on Trulia or Zillow for values, I do use them to indicate generalities because I do not find them to be very accurate. Each web page has a section that explains how they arrive at their values. I do use the Standards & Poors Case Schiller Report. I use their numbers and apply them to the specific properties because values can vary from neighborhood to neighborhood. Case Schiller report addresses the Chicago Land area and I find it to be the best as a market indicator. Your can find the Case Schiller Report at: http://www2.standardandpoors.com/portal/site/sp/en/us/page.t… just cut and paste the link into your browser. You will note that values declined about 10% over the past year. The most recent reports project that Illinois home prices will hit bottom during the 2Q of 2010.
Web Reference:  http://www.susankklatt.com
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