Okay, Zillow doesn’t suck, per se, but it was a catchier title than “Why Automated Valuation Sites Are Bad For Real Estate”.
You can read the post here, but for the visual, here you go. Below are six randomly selected properties in the New River Valley, along with their “value” on Zillow, Trulia, and what they actually sold for.
| Address | Zillow | Trulia | Sold Price |
|---|---|---|---|
| 210 Ardmore St, Blacksburg | $237500 | $264100 | $265000 |
| 101 Woodbine Dr, Blacksburg | $192800 | $172800 | $175000 |
| 1200 Cambria St, Christiansburg | $162000 | $194500 | $175500 |
| 690 Walters Dr, Christiansburg | $218200 | $193600 | $179000 |
| 501 Sixth St, Radford | $217400 | $241600 | $239000 |
Trulia gets closer more times than Zillow, but no one gets it right. When you need to price a home, sites like Zillow and Trulia are fun to look at, but at the end of the day it doesn’t replace a real life human being.
Jeremy – I only learnt about Trulia valuations from your website! I used to think that only Zillow had these. As long as these guys keep their database up to date by tracking all recent sales, the accuracy of these sites should improve over time.
As an investor, my best source to estimate valuations is my property manager 🙂 I also look at assessors records and comparable sales listings from my Realtor.
It’s a good point, Raj – small sample size. Maybe I can can pull some more sometime – what would be more interesting? 30? And no, I didn’t look at original list price versus final sales price; I thought about it, but honestly felt that it introduced too much variable into things … for this exercise I only wanted to see how close they got to FINAL sales price. But again, it’d be interesting.
My experience has been that Trulia is almost always better at their auto-valuations, but I don’t know why that is. Do you use either of these sites? If so … which one? Why? Just curious.
Based on your sample it looks like Trulia has excellent correlation. Not sure if their algorithm is pretty darn good or your sample worked out in their favor.
“but at the end of the day it doesn’t replace a real life human being” – I would argue, for this sample that you have, Trulia did a better job than the real life human being. Simply add another column with the original asking price which is what the real life human beings (Realtor and seller) came up with for the property’s valuation. Then see whether the human or Trulia was closer to the final closing price 😉