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Now that that's out of the way, let's get to the little secret that even their Zillow acknowledges (sort of). The "Zestimates" just aren't very accurate. At least not in the Beach Cities and certianly not in Manhattan Beach. Zillow says that the Zestimates are a good "starting point". I'm not even sure I would agree with that. They're maybe an indication of price. As long as the wind isn't blowing.
In the LA area, Zillow admits that only 36.8% of the homes sell within 5% of Zillow's value. That's not a very good track record in my humble opinion. Would you get on an airplane if 6 times out of 10 it got within 5% of your destination? I think not.
2801 N Valley Dr. Zestimate $1,201,028. Closed escrow 2/11/2015 for $985,000.
1904 Ocean Dr. Zestimate $1,983,757. Closed escrow 2/12/2015 for $3,250,000.
1915 Duncan Ave. Zestimate $1,705,054. Closed escrow 2/11/2015 for $2,150,000.
864 5th St. Zestimate $1,736,217. Closed escrow 2/10/2015 for $2,900,000.
Real data. As you can see from this very random small sample size, the Zillow estimates are not even close and off by over $1,000,000 in two instances.
Why would anyone trust their valuations?
Here's what the public needs to understand. Zillow is the map, not the territory. Automated valuation models (AVMs) such as Zillow, or for that matter any of them, have not been in these homes, have no market insight as to pent up buyer demand or any other factors driving prices right now in the beach cities. I can replicate the same results any day of the week and in both Hermosa Beach and Redondo Beach as well. I'll be writing more about Zillow and the best way to work with their data in the future.
|Zillow CEO - looks like a nice guy to me.|