Today I’m answering the question, “How accurate is the the Zillow estimate for my home in Austin?” Zillow’s home value estimator computes an estimated market value for your home based on a proprietary formula using public and private data – they call it a Zestimate (that’s a fun word to say!). In Febuary, the Zillow’s CEO sold his home – how close do you think his Zestimate was? Think about it for a minute and I’ll give you the answer in below.
Anyways, sometimes you visit Zillow to find out your home’s value just because it’s fun to imagine how much you could sell your house for and how much extra money you could put in your pocket even though you have no intention of selling. Other times you could be seriously thinking about selling your home in the Austin area and need the right information.
Can you trust that number? How accurate is it? The simple answer is that your Zestimate is probably wrong by a significant amount and putting too much faith in the sales price it gives you is dangerous. Zillow’s own fine print and reports support this. More than 60% of Zestimates are off by more than 5% and 40% are off by more than 10%! Your home’s actual value could be much higher or much lower than the number you get on Zillow. For my home, Zillow gave a number with a margin of error of $50,000 higher or lower! That’s not helpful at all!
In fact, Spencer Rascoff, the CEO of Zillow sold his home in Febuary for $700,000 less than his Zestimate – a 40% difference! ($1,750,000 to $1,005,000, 40% – do math on side). Zestimates can be so far off because they don’t have specific information. Zillow hasn’t visited your neighborhood or seen the kitchen or bathroom update you just put in so they might price your house too low. They also don’t know about that new prison that was just built behind your friend’s house that is dragging that neighborhood’s value down.
So how can you use a Zestimate? It is a tool that can help increase your real estate awareness and give you as a homeowner public access to some information. However, it can kind of be like guessing the number of gumballs in a jar – you know the jar is big and the candy is small but how many exactly are in there is anybody’s guess. If you really need to know the value of your home, don’t take your Zestimate at face value and contact a real estate pro like me. He or she can give you a pretty good idea or your home’s value in a short amount of time.
Anyways, I hope this REAL ANSWER has been helpful for you. If you are thinking of selling your home, you should contact me because I help people like you move smart and sell for more money.
Selling your home at the right time could mean you’re moving with an extra $20,000 in your pocket. You know you’re going to sell this year, but knowing when to do that is crucial! Today I’m going to share with you when is the best time to sell your home, but first I’m going to tell you how one family sold smart, timed it right and won big! I was really excited to be working with a family who had outgrown their home and needed to find a bigger place to raise their children. When we met at their home, I knew we could list and sell their home right away, but they would be leaving money on the table. If we waited just a little bit and fixed up a few things in their house, they could sell their home and make the move with a lot more money than they expected. So we developed a plan to make their home more valuable and appealing buyers and determined the ideal time to sell their home to get them the best price. In the end, our plan was a huge success and together we sold their home for $20,000 more than they believed they could! Being able to see this all work out for them and seeing how happy they were is why I love my work! What would you do with an extra $20,000 you could make by selling your home at the right time?
To know when is the best time to sell, we need to look at three trends. We need to understand trends for the number of other homes available and sold each month (SUPPLY & DEMAND), how fast homes sell (VELOCITY) and how much homes sell for compared to the list price (VALUE).
SUPPLY & DEMAND – Number of Homes Available & Sold
Over time, we can see a trend where the number of homes for sale is greatest in June and July and fewest in December and January. This means that if you are selling your home, you have the most competition for buyers in the summer and the least competition in the middle of the winter. The number of homes sold each month will show us demand – more homes sold means more buyers buying. This trend is similar to supply – it usually peaks in June or July and is the lowest in January. Since it usually takes 30-45 days to close, we can assume that the number of buyers actively looking for a home like yours is a little ahead of this curve. The greatest demand is in May and June and the lowest demand is in November and December.
VELOCITY – How Fast Homes Sell
Knowing that supply and demand go up and down at the same time, you might expect the rate at which homes sell to be pretty consistent – WRONG! Homes are on the market for the least amount of time in April and May and that number gradually increases through the Summer and Fall, peaking during the holiday months. Remember the length of time it takes to close a home – 30-45 days – that means that homes that sell the fastest are probably listed for sale in March or April and close in April or May. I’m guessing you can start to see all the information coming together, but let’s look at one last thing.
VALUE – How Much Homes Sell For Versus List Price
The ratio of a home’s sale price to the price the owners listed it for is in some ways a combination of all the numbers we already looked at – supply, demand and velocity. Over the past few years, sellers are accepting the lowest offers compared to their listing price in January. That ratio climbs sharply to peak in April, declines slightly through the summer and then drops off in the fall.
I’m sure you’re a smart seller and can see the answer for yourself. They seem to indicate that the best time to sell your home to get the most amount of money is in March or April. The number of homes for sale is starting to grow but the number buyers looking at homes like yours is growing much faster – many people want to beat the summer rush. As a result, homes are selling faster and closer to their list price.
If you are thinking about selling, you really need to know how these trends are reflected in just your neighborhood. I made a FREE GUIDE for figuring out the best time for your neighborhood and included a few extra warnings about things to avoid. You can receive that for free by clicking HERE.
If you are at all thinking about selling your home and want to do this the smart way and make sure you get the most money you can, give me a call and I can show you how you could make that extra $20,000 on the sale of your home. Even if you have no choice about when you sell your home, there are other things you can do to make sure you get the most value.
Anyways, I hope this REAL ANSWER can make you a smarter homeowner. Enter your email in the column to the right to sign up to receive more REAL ANSWERS because the right answer can help you no matter when you decide to sell your home. You can also submit your own questions for me to answer. This is Real Estate and that’s the REAL ANSWER!
In Williamson County, which includes Round Rock, Georgetown and most of Cedar Park and Leander, home prices rose 6.6 percent versus last July to $262,000 and home sales volume decreased by 6.5. On average, homes spent two days fewer on the market and the housing inventory declined slightly to 2.4 months.
What do these numbers mean? Well, home prices in Central Austin will continue to push home buyers to places like Round Rock and Cedar Park as affordability becomes a serious issue in Austin. Home values should continue to grow, inventory should stay very low and I would expect that any significant slowing in the market would be seen in Austin before Williamson County.
If you want to know more about the Austin market, you can visit this other post and if you are thinking of selling your home in Williamson County and want more information on how this information is affecting your neighborhood or home in particular, drop me a note or call me and I’d be happy to help!