Zillow and the prices they post

[ScratchCat]

20. Zillow changed up their algo a while back

I work in real estate in north Florida and I can tell you for certain they changed up their algorithm a while back after losing millions by buying homes at their valuation prices. They went from way over-valuing properties to now under-valuing properties in many cases. They actually give a very wide range now as well as some pinpoint number which is around the median.

As some have noted already, they don't know what you have or haven't done to your home. If you live in a "cookie cutter"-type subdivision where the homes are all similar in age and size, they are pretty accurate for the most part. If you live in a rural area, or a suburban/urban area with a hodge-podge of homes of differing ages and sizes, the are less reliable. If you have a bunch of extra features or additional structures, they likely don't know about these and haven't considered them either.

Housing prices and real estate in general is local in nature. What is happening in your area might not be happening in others(or maybe it is). Here where I live, there is an artificial shortage of homes under a certain price point but also a relatively small pool of buyers(many people simply dropped out of the market hoping it will come back down some day). This is keeping prices stable to increasing. Builders still want more and more for new construction, with many demanding no less than a six figure profit to even build 1,700 sf worth of house(median household income is around $70-75k here). We have a large-enough white collar population earning double the median household income being the State capital and having major universities and medical centers that there is constant demand at some level(We have also had a constant influx of new residents over the past five years and they aren't poor or middle class). Its just that the working folks that live around the median can't afford anything anymore because its all being sold to the top 15%-20% of the population that are willing to (over)pay the prices.

Generally, prices just can't go up much more because its just not sustainable. This is probably true for most markets.