How accurate are Zillow home price/value estimates in San Diego?
When you are thinking about selling your home by listing online or by selling to home buying companies like I BUY SD, it is easy to get carried away by imagining everything you will do with all that lovely fresh cash from the home sale.
But more than a few surprised homeowners discover only too late that the small fortune they were counting on turned into pennies on the dollar in the real-life home marketplace.
In this way, betting your home sale proceeds on the examples of home value estimates you find online like at Redfin and Zillow, can put you on shaky ground indeed. While Zillow’s Zestimate, home value estimates can give you somewhere to start when guesstimating the sales price on your home, they are not intended to serve as your only source of information when pricing your home for sale.
Many such home values are… in a word… overestimations. Once you slap that “for sale” sign on your home and set the sales price, every subsequent reduction will feel like you are ripping yourself off. This is the case even if you have to reduce your home because you used inaccurate pricing estimates your found online to set that price!
If you refuse to lower the price, you risk not selling it at all. If you lower the price and it sells, you risk feeling like you got a bum deal. Is there another way? We think so!
How does Zillow get data for their Zestimate in San Diego?
As of June 2021, Zillow has Zestimate home valuations for 97.5 million homes across the country. Their algorithm examines hundreds of data points for each home.
Zillow incorporates data from county and tax assessor records and direct feeds from multiple listing services and brokerages to calculate a Zestimate. The Zestimate also heavily focuses on the home’s concrete facts and features, like:
- Factual house data like square footage, number of bedrooms, number of bathrooms, the year it was built, and location
- On-market data such as listing price, description, comparable homes in the area, and days on the market
- Off-market data from tax assessments, prior sales, and other publicly available records
What Zillow can’t see are the property’s current condition and features. For example, a home in an older neighborhood where the last few homes sold were completely remodeled will increase the Zestimate for all homes in that area. However, the Zestimate on a home in this same neighborhood that has not been remodeled and has roof or foundation issues will be highly inaccurate.
In San Diego, Zillow has Zestimates for over 840,000 homes. Using their own data to compare the accuracy of Zestimates, we can see that there is a large margin of error for off-market homes. Only 44.2% of San Diego homes sell within 5% of their Zestimate, and 70.8% sell within 10% of their Zestimate.
Let’s Do a Home Pricing Estimate Together for a home in San Diego
Head to your favorite home estimation site. It could be Zillow, Realtor, Trulia, Redfin… whatever you pick, find one home you think is a lot like the home you have for sale and then find the home value estimate. Write that number down.
Next, go to each of the other home sales sites and find that same house listing. Write down the home value estimate of the same home on each site.
Now take a look at the group of numbers. Are they all the same? Probably not. Yet all those numbers are supposed to be the value for the same exact house! This doesn’t even consider distressed properties, or the condition of the home.
How could this be? Their estimates are not true estimates. The very definition of an “estimate” is reflective of a price range, not an exact dollar amount.
While you will never find any of these big box online home sales websites explaining this in so many words, that home value estimate you see is not an absolute number. It is only one home site’s estimation of what that home may be worth.
This is why the numbers can vary so much for the same house from one site to the next.
A Better Approach to Selling your San Diego Home
Instead, take all those numbers you just wrote down and arrange them from lowest to highest. This is at least the start of a true home value estimate for that house.
But it still doesn’t factor in findings from the home inspection, current decor, unreported weather damages, what is going on in the surrounding neighborhood, the time of year and similar factors that can and do impact what any home will actually sell for.
This is why using so-called “estimates” you find online will never be sufficient to help you set a sale price or find a value for your home that is truly reflective of what you can reasonably expect to earn from the sale of your home.
The only way to get a truly accurate appraisal is to hire a local appraiser and then work with a real estate agent you trust.
If all this seem like a lot of work…it is. We will offer you a fast cash offer to sell your home in San Diego. Give us a call or fill out a contact form and we can send you a fast offer on buying your home outright for cash.