Home-Value Web Sites Miss the Mark
Online home-value sites offer some useful tools, but their estimates are often wrong.
"The percentage of error on these estimates is still very large," says Delores Conway, director of the Casden Forecast at the University of Southern California Lusk Center for Real Estate. If there are not many comparable sales in one area, for example, she says, "the estimates will have huge errors in them."
Zillow.com and Cyberhomes.com rely on computer-generated automated models to estimate values. The models help compensate for the fact that many neighborhoods don’t have enough sales to generate accurate values based on experience.
But these computer models don’t reflect home condition, improvements and may not even accurately convey property descriptions.
Marty Frame, general manager of Cyberhomes.com, says the data on the site is best used as a way to form an overall impression of a neighborhood.
"Our goal is to provide you all this information and let you cherry-pick the things that are most interesting to you," Frame says. "You're going to look at an estimate and say, "that makes sense' or 'that doesn't make any sense."'
From my observation, the error in valuations seems to be especially high in New Mexico and particularly Santa Fe. I attribute this to two factors. First, New Mexico is a non-disclosure state. This means that the sales price of a property does not become a matter of public record. Secondly, in Santa Fe, the idea of a tract home is very rare. Most homes in Santa Fe are custom or semi-custom making a generalized appraisal by a computer subject to a high degree of error. If you would like an estimate of the value of your home, please feel free to call me at 505-670-5604. I'd be happy to provide this information to you free of charge.
The Associated Press (06/23/2008), contributed to this post.
"The percentage of error on these estimates is still very large," says Delores Conway, director of the Casden Forecast at the University of Southern California Lusk Center for Real Estate. If there are not many comparable sales in one area, for example, she says, "the estimates will have huge errors in them."
Zillow.com and Cyberhomes.com rely on computer-generated automated models to estimate values. The models help compensate for the fact that many neighborhoods don’t have enough sales to generate accurate values based on experience.
But these computer models don’t reflect home condition, improvements and may not even accurately convey property descriptions.
Marty Frame, general manager of Cyberhomes.com, says the data on the site is best used as a way to form an overall impression of a neighborhood.
"Our goal is to provide you all this information and let you cherry-pick the things that are most interesting to you," Frame says. "You're going to look at an estimate and say, "that makes sense' or 'that doesn't make any sense."'
From my observation, the error in valuations seems to be especially high in New Mexico and particularly Santa Fe. I attribute this to two factors. First, New Mexico is a non-disclosure state. This means that the sales price of a property does not become a matter of public record. Secondly, in Santa Fe, the idea of a tract home is very rare. Most homes in Santa Fe are custom or semi-custom making a generalized appraisal by a computer subject to a high degree of error. If you would like an estimate of the value of your home, please feel free to call me at 505-670-5604. I'd be happy to provide this information to you free of charge.
The Associated Press (06/23/2008), contributed to this post.
Labels: Finance, Market Stats, Santa Fe
posted by Steve Hardy at
12:44 PM
