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What's up with my Zestimate? I get this question a lot. And not just from my clients who reside in Palatine, Il US of A, either. If I had one wish, it would be that consumers, buyers and sellers in the real estate market would not take Zestimates as gospel. And here's why...because they are most likely off - sometimes WAY off. Why are they off? For many reasons.
First, of we need to understand how Zestimates are calculate. The Zestimates you see on Zillow is derived from an Automated Valuation Model (AVM). An AVM is "A service that uses mathematical modeling to value properties. The majority of automated valuation models (AVMs) compare the values of similar properties at the same point in time."All About AVMs There are many real estate websites out there that use AVMs. This is a technology based model. Computer generated... There's nothing wrong with AVMs UNLESS you ignore the following considerations.
It's a Realtor's job meet you, tour your proerty, learn what updates have been done to the property, why your property is unique vs others on the market and go back to the office, sift through 20, 30, 50, 100 active, sold and pending listings and hand pick the ones that are most like your property. It's my job to discuss your Zestimate with you and provide you with a custom market analysis for your specific property. Am I putting in a plug for my profession? You bet I am. Because time and time again, I'm in a meeting with a seller or buyer helping them to understand why my Custom Market Analysis is different from the Zestimate they printed off, holding in their hand and are swearing by those numbers.
This is a HOT market for buyers and sellers, ladies and gentlemen. Great time to get off your parents' couch and buy. Great time to downsize, and a great time to aquire investment properties. I love this industry and am here to help.
Just my two cents.
'Til next time.
I LOVE New Year Predictions and agree with all below except mortgage rates. I'm hearing from my lenders they predict rates will not inch up to 5%. We'll see what happens....Regardless, even at 5% rates are still at an all time historic low!!!!
Realtor.com®'s top housing predictions for 2015 are:
1. Millennials to drive household formation. Households headed by Millennials are expected to see significant growth in 2015, particularly as the economy continues to make gains. Millennials are expected to drive two-thirds of household formations over the next five years, according to realtor.com®'s report. The forecasted addition of 2.5 million jobs next year, as well as an increase in household formation, are the two factors that realtor.com® points to in driving more first-time home buyers to the housing market.
2. Existing-home sales on the rise. Existing-home sales are projected to rise 8 percent year-over-year in 2015, as more buyers enter the market. Distressed properties will make up a smaller share of that growth, unlike in 2012, when a similar increase in existing-home sales was mostly driven by distressed properties.
3. Home prices will rise. Home prices are expected to continue to edge up in 2015, with realtor.com® forecasters predicting a 4.5 percent gain.
4. Mortgage rates to inch up to 5 percent. In the middle of 2015, mortgage rates are expected to increase as the Federal Reserve increases its target rate by at least 50 basis points before the end of the year. That will likely bring the 30-year fixed-rate mortgage to an average of 5 percent by the end of 2015. (It's currently averaging 3.89 percent, according to Freddie Mac.) The 1-year adjustable-rate mortgage, on the other hand, is expected to rise more minimally. "Lower ARM interest rates will influence an uptick in buyer interest for adjustable and hybrid mortgages," realtor.com® notes.
What are YOUR predictions??
2014 Statistics from National Association of Realtors (NAR)
* For Sale By Owners (FSBOs) typically have a lower median selling price $208,700 compared to $235,000. Thus, the typical agent-assisted home sale typically has a 13 percent hiigher sales price than the typical FSBO sale.
* Half if FSBO sellers took no action to market their home, and 73 percent did not offer any incentivesd to attract buyers.
So....even calculating in the agents' commission, agent assist sales will typically yeild a higher home sale price. Makes cents....actually most likely dollars!