Zillow home value estimates SALES PRICES for Phoenix are OFTEN dangerously misleading

That is pretty poor. I come across people all the time who want to believe what they see at a tax appraisal district or Zillow as being an accurate reflection of market value. There is much more than meets the eye and I wish someone could get the word out about what is real and what isn’t.

The fact that no one bid on them means that the price is too high, not the other way!

Michael, Good to know. I wonder why Tom says otherwise. I didn’t look into it myself. I’m confused now.

Zillow is just one data point. People should do their own research, as well as contact a couple of different Realtors in the area.

Hi John, it’s David G from Zillow,

On this topic, Tom is not a knowledgeable guy. Michael is correct. Zillow excludes foreclosure transactions from Zestimate calculations just like a Realtor will typically exclude foreclosures from their CMA.

Excluded transactions are clearly marked on the site. Take this home for example: http://tinyurl.com/4×2esl - there’s an asterisk next to the trustee sale that happened on 8/25/08 that says “* Transaction not included in Zestimate.”

Please correct your post.

David,

Thanks!

So Zillow doesn’t use foreclosure sales in Zestimate calculations.

I wonder why he was confused?

Does Zillow show the value given on Trustee Deeds as the sale price? If so, perhaps he saw that and assumed they were also used in the Zestimate calculations.

David,

So I finally broke down and checked it for myself.

The very first home I looked at in the MLS that was bank owed in my zip code had a trustee deed dated 7/24/08 with a value of $119,600. The new owner was Aurora Loan Services LLC.
http://armls.imapp.com/ilinks/viewer/2f839ff5f6425c51e0276409381b739e

Zillow shows that same home sold on 7/24/08 for $119,600. So Zillow is presenting this Trustee Deed as a sale.

http://www.zillow.com/homedetails/9460-E-Mission-Ln-UNIT-123-Scottsdale-AZ-85258/8061468_zpid

Now, don’t miss the asterisk by the price which states the sale was not used in the calculation of the zestimate.

So I think Tom was indeed correct. Zillow is listing Trustee Sales as open market sales (with an asterisk) which is misleading and in his opinion, dangerously so.

Now, the website says (follow the asterisk) that that sale is not used in the calculation of the zestimate.

So it seems you are both right.

John,

With all due respect, your conclusion is incorrect.

Nowhere on the site does Zillow either claim or suggest that the trustee sale is a market sale. It is however a sale - I hope that you understand that.

Zillow is not guilty of either of the criticisms that you and Tom are trying to attach to the site. We don’t suggest that trustee sales are market sales and we don’t use trustee sales in Zestimate calculations. I can obviously understand where Tom’s confusion comes from but the bottom line is that he is jumping to false conclusions and not reading the details on Zillow.

I must respectfully insist that you correct your post.

I know that the prices on Zillow for Phoenix are always skewed and usually to the very high side vs being lower than actual… and now, thanks to your research I know why. Seems to me Zillow would be served quite well buy spending less on their legal team writing disclaimers to cover EVERYTHING KNOWN TO MAN and SEVERAL THAT AREN’T and spending more to insure the validity and accuracy of their data. If you “guess” that there is a 6 to 9 month time lag between a foreclosure deed being foreclosed and a subsequent sale of the foreclosed property to a buyer being recorded - there are thousands of properties on Zillow that at best show what the bank took them back for and NOTHING even close to their current asking or sale price until a subsequent-to-foreclosure sale takes place!! And even then Zillow does not break their necks getting data updated so it seems to me. It can take another three or four months for a sale to show up on Zillow after it records. In short, Zillow is virtually useless in these days of multiple foreclosures in various neighborhoods. You may be seeing housing prices reported on Zillow that are more indicative of the all time PEAK prices than they are of current reality. Pity. But there is no law against being sloppy and lazy. Just becomes illegal if you do it intentionally in a scheme to profit from so doing. Otherwise they’re off the hook, legally. And that’s too bad!