Another Zillow Update

By Dave Fratello | October 24th, 2013

Back in August we set out to test Zillow by seeing how their Zestimates of newly listed properties panned out in the real world. (See "Testing Zillow's Estimates.")

More results are in now.

Let's start with the home run Zillow hit.

That was at 1300 12th St., #D, a 2br, 1100 sq. ft. TH.

As the TH was newly listed, the sellers requested $699K, but Zillow said, "no, we're thinking $683,492."

In the scheme of things, that $15K difference doesn't look like much, but it was 2% to the downside.

Guess what? Zillow was dead-on. Final sale price: $683,000. (OK, actually, high by $492.00.)

You might say, hey, townhomes are easy to comp out. It's basically a raw PPSF calculation. But there were no recent trades in this particular building. You have to go back to 2011 for one and 2009 for another. So Zillow's computers picked the value here perfectly without too much direct guidance.

And townhomes can fool Zillow, too.

For reasons known only to the spinning gears inside Zillow's estimator machine, they pegged 1202 Tennyson #1 as having a value of $1.2M+ back in August, when it hit the market at $870K.

Tennyson did get bid up a bit to $880K, but that's still $350K shy of Zillow's estimate at the time.

We had said up front in that original post that "Zillow is clearly going to blow it completely" on this one, speculating that perhaps the lot size for the whole complex (13,120 sq. ft.) had fooled the algorithms. And yet, with 1300 12th St., the computers weren't fooled by the large lot size (11K+), so who knows?

Though this TH just sold, Zillow is still shooting high on its value. The current Zestimate: $1.042M.

We also knew Zillow would blow it on the new construction at 594 33rd. That one came out at $2.899M, but Zillow was thinking $2.3-ish. It has sold for $2.848M.

Zillow didn't know that was new construction, and didn't know that 1509 Magnolia was recently remodeled. Zillow guessed $1.079M, but it sold near the asking price at $1.335M.

We hate to punish the poor, confused computers here – we knew in advance that all 3 of those Zestimates would fail.

Then there were 3 listings among our selection of 12 from August that dropped out. Zillow's opinions on those won't matter. They were:

  • 25 Sausalito Circle in the Village – quit the market.
  • 1806 Marine – leased out instead of selling.
  • 3201 Palm – quit the market.

We may be nearing a judgment point on 1336 2nd Street (start: $1,100,000, Zestimate: $1,045,625)

On this one, both Zillow and the sellers shot high. The price on 2nd came down to $999K before they posted a deal this week. Zillow was closer on that one.

Zillow was also closer to reality with 1027 Boundary Place (4br/4ba, 3260 sq. ft.), the "Chateau" that closed last week. (See "A Chateau to Call One's Own.")

When that one listed in August, the sellers were asking $1.980M.

Zillow said: $1.811M.

The market said: $1.770M.

Zillow was within 2%. Not bad, considering that the property was unique in so many ways.

Another pending escrow at 112 18th St. will not likely validate Zillow.

While we could easily understand the rationale, based on comps, for Zillow's $4.270M estimate on that one, the sellers were looking for $5.195M and made a deal fairly quickly (for a $5M listing) without taking any public cuts.

On one more closed sale, 509 N. Dianthus, we've already reported that Zillow had shot high by 7%. (See "Zillow Estimate Update.")

Something has happened to every one of those listings from our first post in August except the once-a-FSBO listing at 1757 Voorhees (start: $1,425,000, Zestimate: $1,479,691, current price: $1.380M).

So here's the roundup as we see it today. Out of 12 listings we were tracking, half can't be judged yet:

  • 3 listings quit the market
  • 2 listings are in escrow
  • 1 listing is still for sale

Among those that have sold:

  • 3 estimates were way off sold prices, but we expected those to flop
  • 2 estimates were very accurate compared to sold prices
  • 1 estimate was high by 7%, not very accurate, not too far off

We'll look to wrap up this series when the two pending sales close and something happens with 1757 Voorhees.

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Here, again, is the list we began with, including the Zestimates in the grid:

ADDRESSBD/BASQFTLOTSTART  ZESTIMATESTART
1202 Tennyson Street #1 3/3 1755 13120 $870,000     $1,231,970 08/12/13
1509 Magnolia Avenue 3/2 1342 4867 $1,349,000     $1,079,017 08/08/13
1300 12th Street #d 2/3 1130 11928 $699,000     $683,492 08/06/13
594 33rd Street 6/6 3500 5023 $2,899,000     $2,313,612 08/05/13
1027 Boundary Place 4/4 3263 4212 $1,980,000     $1,811,135 08/01/13
3201 Palm Avenue 3/3 2469 4637 $1,775,000     $1,765,274 08/01/13
509 North Dianthus Street 4/3 2157 3251 $1,625,000     $1,746,052 08/01/13
1757 Voorhees Avenue 4/3 2460 7498 $1,425,000     $1,479,691 07/30/13
112 18th Street 6/7 4237 2693 $5,195,000     $4,270,400 07/29/13
25 Sausalito Circle 3/3 2050 3915 $1,685,000     $1,272,286 07/27/13
1336 2nd Street 3/2 1223 5001 $1,100,000     $1,045,625 07/25/13
1806 Marine Avenue 3/2 1147 5076 $899,000     $945,996 07/22/13

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