People ask me sometimes what I think about websites like Zillow or Cyberhomes. In short, I don’t think computers do as good of a job appraising properties as real humans. Call me biased, but there are some things that real people can still do better than machines. However, though these websites cannot fully replace real estate appraisers, they do have a place to help gain a ballpark figure for a house (please take that with a grain of salt though because figures can still be way off). Additionally, I’m a fan of the multi-year trend graphs that Zillow produces.
The Sacramento Bee actually published an article last Friday about this very topic entitled Home Front: Appraisal sites on Net often fail to pin down accurate prices. The bottom line is that websites like Zillow seem to have greater accuracy in tract markets with ample sales, but even then they are only so good because they cannot sift through value indicators like condition, important neighborhood boundaries, upgrades, and a local appraiser’s knowledge of the market area.
I ran some test cases over recent work I have done and found the following:
– My house (tract): Zillow was 28% high / Cyberhomes was 24% high.
– Elk Grove house 2.0 acres: Zillow was 46% low / Cymberhomes had no value.
– Tract House in Davis: Cyberhomes was 4% high / Zillow was 2.5% high.
– Sacramento River property: Zillow was 40% low / Cymberhomes had no value.
– Tract House in Galt: Zillow was 9.5% high / Cyberhomes was 5.0% low.