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Zillow Zestimate Accuracy in San Francisco | San Francisco Real Estate Podcast - YouTube
Channel: San Francisco Real Estate Podcast
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hey hey and welcome to the San Francisco
real estate podcast with your host Matt
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Morgus
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alright that's me it's around 1 p.m. on
Thursday November 15th 2018 welcome to
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San Francisco everybody if you live in
the bay here if you live in California
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you know that we're having some massive
forest fires about 200 miles away from
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San Francisco there's a fire called the
camp fire happening right now which is
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the biggest in state history needless to
say I feel awful for the families who
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are going through that tragic event and
the people who have lost their lives and
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their property it just keeps going up
and it's just a terrible thing we're
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suffering just a little bit here in San
Francisco the the Golden Gate Bridge I
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every time I do a podcast you always
hear me brag about my view but the
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Golden Gate Bridge is officially just
completely hazed smog doubt with this
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smoke here the smoke is just trapped
here in the bay it is awful the air
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breathing the air right now is just pure
garbage and it's not really worth going
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outside to risk your health so anyway if
you live here in San Francisco you
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already know this but if you're out of
the state it's real it's real here it's
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getting real
today let's jump right in let's spin
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this to a positive note let's talk about
Zillow Zestimates here in San Francisco
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for 99.9% of you out there who are
relatively interested in real estate you
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know exactly what a Zillow Zestimate
is but just in case for the point zero
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one percent of you who don't
no, Zillow is a website you can go online
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you can search for properties and it's
pretty cool because it will actually
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give you an estimate of what Zillow
thinks your property is worth now why do
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people use Zillow Zestimates I think
consumers out there sellers of homes or
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homeowners in general are looking for a
quick easy way to determine the value of
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their house there's a saying going
around
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an app for that there was an app for
this there's an app for that
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there's got to be a quicker easier way
to do it right well technically yes I
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guess you can go on Zillow and type in
your property address and give them your
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information so they know exactly who you
are and where you live and what kind of
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property you have and you can edit your
updates of the house how many bedrooms
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how many baths the square footage what
kind of finishes you have did you update
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the roof did you update the deck have
you remodeled the yard things like that
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so you can give them all this
information big data collection course
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and they spit out as estimate of what
they think your house or property is
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worth this could be a condo this could
be a a single-family home so I got
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interested and curious to see the
accuracy of these estimates a lot of
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people use them and a lot of people
really believe in them further quick
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easy easy way so here's what I learned
in San Francisco County let's just talk
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about San Francisco in general Zillow
has a page called data coverage and is
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estimate accuracy and on this page and
I'll put a link up to it on my website
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which is at northernSF.com check it
out so on this page it goes to every
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county in California that has Zillow's
Zestimate okay
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and from what I've realized here San
Francisco has the least accurate
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Zillow's estimates in the state of
California now for example let's go
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through this and that was shocking to me
let me say that first before I jump in
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pretty shocking
it gives it as estimate accuracy of two
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stars two out of four stars not very
good if you ask me but here we go
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the Zillow's estimates they have a
hundred ninety-eight thousand homes on
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Zillow in San Francisco now the homes
with the actuals estimates they have a
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hundred and seventy one thousand which I
think is like 87
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percent of them have Zillow's estimates
now this is where it gets interesting we
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can look at certain percentages here
that have sold so the way it works is
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Zillow compares what theirs estimate was
before a property sold within three
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months and then after it's sold when
what the real sales price actually is so
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twenty six point nine percent of homes
that have a Zestimate end up being
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within 5% of the sales price within five
percent of the sales price so let me
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repeat that twenty six point nine
percent of homes that actually have as
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estimate that were on Zillow and then
the homeowners listed and sold their
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places their properties twenty six point
nine percent are within five percent of
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the sales price if you ask me that's
pretty low and that is the lowest by
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county in the state of California let's
move on to the next one forty nine
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percent of homes that have sold within
the last three months so within ten
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percent of the sales price so this
estimates forty nine percent of those
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estimates on Zillow sold within 10% of
this sales price I mean these numbers
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are staggeringly low here in San
Francisco so so so low now let's step it
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up so what's what's a high percentage
here so seventy nine point five seventy
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nine point five percent of zestimates on
Zillow sold within twenty percent of the
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sales price I mean I think at that point
anybody could just pick a number and
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guess what a property is gonna sell for
staggering staggering if you ask me now
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I don't want to bore you with stats but
let's let's look at the last one the
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median air price or the median air here
is ten point two percent
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and and what does that mean it means
that half of this estimates in an area
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were closer than the air percentage and
half are farther off so I'm just reading
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this up the website it says for example
in Seattle estimates for half of the
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homes are within 5% of the selling price
and half are off by more than 5% so here
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in San Francisco what that means is half
of those estimates are within five are
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within 10% of the selling price and the
other half are off by more than 10% very
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very very interesting so this just goes
back to show you that you've really got
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to be careful and know what you're
getting yourself into and what you're
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reading online there's a whole lot of
fake news going around lately which I
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think you know politically is is just a
giant mess and we all we all know this
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and I want to talk politics but even for
big data companies like Zillow trying to
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collect your data about the home that
you own the property that you own and
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giving you a value and giving you as
estimate that if you were to take a
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survey out there a good majority of the
people truly trust these estimates and
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believe them now
why is it that only twenty six point
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nine percent of the Zestimate here in
San Francisco are within 5% of the sales
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price good question so this is just my
opinion I I don't do big data I don't do
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all these crazy algorithms and try to
figure out homes and things like that
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but here's what I do know I do know if I
look up at Orange County Orange County
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California is within sixty eight point
two percent sixty eight point two
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percent of those estimates are within
five percent of their sales price which
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I believe is one of the highest here in
California yeah I think it is so what's
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the difference between
in Orange County California and San
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Francisco well it's pretty simple Orange
County is very suburbia and it has a lot
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of cookie cutter homes if I'm not
mistaken I've been down there a couple
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times a lot of the homes look alike
there are a lot of subdivisions and it's
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very easy for I would think it would be
I'm not a computer programmer you know
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this but I would think it would be
pretty easy to compare homes in a
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subdivision that look almost identical
and that are almost cookie cutter homes
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I think that's what these Zillow
Zestimates are really good at predicting
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the values of suburbia and cookie cutter
homes now you know in San Francisco just
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about every other property every other
condo is completely different on the
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same block you can have homes built in
the 1800s and you can have mid-century
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modern buildings and you can have a new
construction home all on the same block
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now multiply that times ten blocks
squared and it's just a complete mix of
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architecture and different neighborhoods
now let's spin this on a positive note I
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think that here's what a Zillow zestimate
is good for if you live here in San
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Francisco it's good for you to know if
the values are going up or if they're
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going down now I've kept track of all
the properties that I've ever owned in
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my entire life and I still claim them as
my property even though I've sold them
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just to see if property values are going
up or going down I get an email once a
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month from Zillow's estimates and it
just it is informative it's informative
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to me what's going on in the local
market where those homes are so I think
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that's what it's good for if you're not
going to sell your home in the next year
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or two there's it's great it's a great
website to use use it and use use their
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stats user algorithms use all their
tools that they have I think it's
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fantastic now you're gonna hear my spiel
you know I'm a real estate agent here in
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San Francisco and you know that
I've said this before if you're looking
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to sell your property in the next year
or even two years I think it's very
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important to have a relationship with a
local real estate agent now you go to
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the dentist every six months you go get
a check-up every every six months for
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cavities you go to your doctor at least
once a year for a physical just to check
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up on things maybe more than that it's
the same thing with a real estate agent
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if you're curious about what the
property value is you know you can keep
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it a big-picture view of it from
Zillow's estimates but if you want to
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hone in on it and get a true estimate
shoot shoot you're a real estate agent
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and email once every two or three months
say hey how are things going this this
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this month
are they good property values going up
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are they going down and build a
relationship with a local real estate
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agent that's what we're here for
I hate to say it that's what we're here
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for I am optimistic on the future and
we're apps and developers can be able to
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truly predict the values of homes I
think it is out there and it probably
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will happen in our lifetimes and in the
future no doubt about it but until that
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day comes
take a Zillow zestimate with a grain of
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salt take their accuracies and now that
you know the true data from their
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Zestimate accuracies take it with a big
grain of salt
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definitely so that's my spiel for today
hopefully that was helpful I was pretty
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shocked by those those statistics and
maybe you are maybe you're not I don't
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know but I want to thank you guys for
listening to the San Francisco real
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estate podcast this has been your host
Matt Morgus as always you can contact me
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on my website northernsf.com and you can download the
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podcast just by going to iTunes and
searching for San Francisco real estate
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podcast or just go to Google searches
San Francisco real estate podcast you
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could find it right there
thank you again have a happy
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Thanksgiving this year and we'll be in
touch thanks bye-bye
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you
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