Zillow Estimates
By Charles TurnerZillow just dropped the Beta tag from their name. When it was released last year, I posted this and this. What we found was Zillow didn’t like bedrooms. Turning a 4 bedroom house into a 1 bedroom house added $60,000 in the Zestimate.
Using our four bedroom, two bath single family rental property in Southeast, Zillow estimates the homes worth at $413,500 within a range of $343,500 – $480,000. The tax record is accurate. The range is huge; close to worthless but probably reflects a major fixer to a fully remodeled house. I’d probably consider $413k if I got an offer for it.
What happens when we tweak the home’s stats:
Lose a bedroom (3 bed, 2 bath): plus $525
Lose 2 bathrooms (2 bed, 2 bath): minus $1815
Add a bath (4 bed, 3 bath): plus $11,168
Now here’s the one I don’t get: lose a bedroom, add a bath (3 bed, 3 bath): +$55,634
The upper range of the house has now gone up to $516,000.
I didn’t mess with the stated square footage until now: add 1000SQFT and value to the base house goes up $141,000. With the added square footage, there is less difference between changing the bed bath configuration. The highest value becomes 4 bed, 3 bath, +1000SQFT which adds $155,100 in value.
Overall, I give more credence to the “truth” than the hypothetical. I think their first shot at value isn’t bad. Some of the changes seem a little out of whack- there must be a premium for larger bedrooms or as a ratio to square footage. Three bed, three bath seems like a strange combo to place a premium on.
I remember reading last year that Zillow was trying to build new algorithms to anticipate features. Like guessing that a view or water frontage exists when houses are more expensive on one side of the street. So if Zillow finds a 1 bedroom house with very large square footage per bedroom relative to the area, it may infer that it is a loft with more luxurious amenities. Less bathroomss may let Zillow infer that the house has classic appeal in some areas because older homes tend to have less bathrooms. Or Zillow could just be screwed up. Just a guess.
Its difficult to calculate curb appeal and location on busy street which both can cause values to go down. Plus, is the house updated? Does Zillow realize what amazing work you guys are doing to the interior? Especially w/ old homes, does Zillow know if the electrical and plumbing are up to date?
I would think not. How would Zillow know Subzero/Wolf versus Magic Chef (Maytag’s cheapy).
And I wasnt even thinking appliances. I was thinking pipes and wires!
I was curious…are you doing this remodel purely as an investment and plan to sell soon or do you see yourselves in this place for a while?
I suppose with the changing market it would be wise to have changing plans though highend homes still seem to be selling well.
That depends on who and when you ask. The house is awesome with few faults. It’s our favorite thing: old house bones and new guts. It is also huge for a family of three and has one hell of a mortgage. It found us, we weren’t looking to move. Some days I can see being carted out in a coffin other days I’d take the first stupid-crazy-low-offer to come in. I can see downsizing but I can’t see dropping in quality and love the location and am I going to find that without stripping something to the studs? Probably not.