|Want to send this page or a link to a friend? Click on mail at the top of this window.|
More Special Reports
|Posted March 17, 2006|
|Property-values website lets everybody compare|
|By Kimberly Blanton, Globe Staff|
A friend rang up Nancy Shilepsky recently to inform her that her Belmont home was worth $695,000. He couldn't help reminding her he had pushed her to buy back in 2000 when it was worth $150,000 less.
Home values ''are somewhat reflective of your financial worth, and I had always considered that personal," said Shilepsky, a Boston employment attorney. ''No more."
With the price of real estate the subject of endless speculation, rumor, and gossip, a new buzzword is making the rounds at cocktail parties: Zillow.
While some real estate data have been available online for several years through city and town assessing databases and registries of deeds, Zillow.com is the first website to pull together local data and enable users to get an instant estimate of a home's current market value -- a ''Zestimate" -- by simply typing in a street address. While they are at it, users are looking up friends, neighbors, ex-spouses, family members, bosses. It also is a gold mine of celebrity trivia, if you know the celebrity's address.
The Seattle-based website was an instant hit; it broke down under the stress of 300,000 hits in its first hours of operation last month. Since then, its popularity has continued to spread.
''I look up everybody," said Shilepsky's friend Nulsen Smith, a financial planner for Rinet Co. He says the Zillow craze is all about comparing your largest asset against those of your friends, neighbors, and relatives, to see ''if they're doing better than you."
The launch of Zillow comes as homeowners' emotions are running high and house prices have begun to soften after years of rapid appreciation. Many question Zillow's accuracy, particularly in locations like Boston and Manhattan that have large numbers of historic or other unique properties. The site's Zestimates also have become a point of contention for real estate agents who feel threatened by Zillow's free access to information previously available only to professionals.
Zillow also can ignite the occasional family dispute. Last fall, Maureen Johns, an agent with Professional One Real Estate in Detroit's suburbs, helped her widowed mother buy a condominium for $210,000. When her mother learned about Zillow on the radio, she plugged in her address: a value of $130,000 popped up. ''She feels she overpaid," Johns said, and ''she's sore about it."
Johns told her mother that the offer price was based on sales of comparable properties in the neighborhood, but her mother would have none of it, viewing Zillow's calculation as ''gospel." The two have patched things up -- to an extent. ''It's kind of an area we don't talk about now," Johns said.
Zillow provides estimates of market values for 46.5 million US homes. The website, still in ''beta," or test mode, continues to add to and improve its data. Accuracy ''varies widely, anywhere from 40 percent off to fairly close," said Don Kelly, spokesman for the Appraisal Institute in Chicago.
Zillow says the value listed for your house is not a precise value, but an estimate. But the range of possible values provided for individual homes, which is included in the information page about each address, gives ''a really good idea" of the price a house could fetch if it were put on the market that day, Zillow spokeswoman Amy Bohutinsky said.
Online for only a month, Zillow already is generating advertising revenue. Silicon Valley venture capitalists have poured $26 million into it, including Benchmark Capital, an eBay.com backer, and Technology Crossover Ventures, a Netflix.com investor.
To test Zillow, Watertown resident Jennifer Shannon said, she looked up ''everyone on my street." She found estimates were most accurate for homes that sold recently and were based on updated sale prices and were least accurate for renovated homes. The house where she lives with her husband and daughter has new central air conditioning and a new kitchen with granite countertops. The assessed value placed on it by Watertown is more than $700,000; Zillow said it's worth $562,000.
That didn't stop the couple from using the website to gauge how much they would offer on a house they want to buy on five acres in Sudbury. In that case, Zillow ''was just about where we thought it should be," she said.
Zillow uses a mathematical model to value properties using public data on home sales downloaded from city and county real estate records. With historical sales prices from these sources, it also estimates changes in the value of a house over the past one, five, and 10 years. When a home sells, it can take six to 12 weeks for a county to record the sales data and for Zillow to pick it up and reflect it in estimates of surrounding homes, the company said.
In older cities such as New York and Boston, Zillow's primary weakness is that it effectively treats all homes equally, said Matthew Haines, the founder of PropertyShark.com, which for years has provided market prices for Manhattan properties and is expanding into Boston and Los Angeles.
Zillow doesn't place a value on ''distinguishing features such as beautiful interior mahogany woodwork or, conversely, buildings that have been abandoned for 20 years," Haines said. Even so, values can be more reliable in urban areas, which have a larger number of comparable sales to draw upon, than in rural areas with few homes or in new subdivisions with little historic sales price information. Zillow's website, which ranks accuracy by city and state, gives the most stars -- four -- to Arizona, Colorado, and California. Rhode Island, Utah, and Vermont have one star. Massachusetts has three.
Zillow is only as good as its raw data, such as square footage or the number of bedrooms and bathrooms. These data are often entered inaccurately into public records, throwing off the estimates. They may also fail to take into account renovations that push up a house's market value if a homeowner did not obtain a permit, or increases in value in homes that have not sold for a long time.
For example, Zillow lists the value of New England Patriots quarterback Tom Brady's newly purchased Boston condominium at $3.4 million, more than seven times the value of the Chestnut Hill mansion that has been the longtime residence of his boss, team owner Robert Kraft.
Smith, the Boston financial planner, has also ''looked up everyone." He was pleased to discover his nine-bedroom Newton home is worth more -- $2.8 million -- than his eight brothers' and step-brothers' houses. When he looked up friends' homes on exclusive Jupiter Island on a recent Florida trip, one complained to Smith that his Zillow's $6.5 million house value was ''a couple million off." And he was dubious about the mere $4.7 million value Zillow placed on the beachfront, North Shore house owned by his professional idol, former money manager Peter Lynch.
Zillow is not perfect but it's always fun, he said.
''I love gauging peoples' reaction to their net worth being public," Smith said. ''When they see the number and it's lower than they thought, you get a negative response."
Kimberly Blanton can be reached at email@example.com. © Copyright 2006 Globe Newspaper Company. © 20 The New York Times Company. Reprinted from The Boston Globe of Friday, March 17, 2006.
|Wehaitians.com, the scholarly journal of democracy and human rights|
|More from wehaitians.com|