Fact vs. Fiction: Zestimates, RedFin, and Reality
You know those so-called property value estimates that tend to veer wildly from reality in any given market -- the infamous and notorious “Zestimates”? Well, RedFin has now entered the property estimate game. RedFin reportedly uses a different algorithm than Zillow to arrive at a valuation, and often the two results differ by hundreds of thousands of dollars (try out your property). Both miss the mark most of the time. They both regularly fail to take into account the factor that is most critical in our market: Buyers.
Certainly outlier buyers are difficult to predict by any source, but buyer behavior is what determines the sales price, which is, in essence, the market value of a property. Market value is not necessarily an empirical result, in part because buyer behavior is an emotional factor and thus difficult to measure.
Buyer behavior is best understood by people (not algorithms) who dance cheek-to-cheek with this emotional response to homes every day -- the buyers themselves and the agents who serve them. Buyers with boots on the ground (versus "armchair" buyers) can get so good at determining sales prices that I often marvel at their accuracy and ability to succeed. Data is great, but it can be oddly inaccurate or unreliable (Zillow, are you listening?).
Here are a few random examples of some recent sales in our market, showing the list price, sold price, Zillow estimate and RedFin estimate.
1332 McGee, Berkeley | LIST: $980,000 | SOLD: $1,607,332 | ZILLOW: $936,534 | REDFIN: $1,256,805
1502 Nevin Plaza, Richmond | LIST: $385,000 | SOLD $410,000 | ZILLOW: $397,846 | REDFIN: $387,147
1717 Rose Street, Berkeley | LIST: $749,000 | SOLD: $1,040,000 | ZILLOW: $814,945 | REDFIN: $1,003,551
60 Arden Road, Berkeley | LIST: $1,049,000 | SOLD: $1,450,000 | ZILLOW: $759,382 | REDFIN: $925,841
7102 Central Ave., El Cerrito | LIST: $495,000 | SOLD: $585,000 | ZILLOW: $471,327 | REDFIN: $582,876
7309 Potrero, El Cerrito | LIST: $799,000 | SOLD: $986,000 | ZILLOW: $763,482 | REDFIN: $913,915
1 Fernhoff Court, Oakland | LIST: $1,195,000 | SOLD: $1,325,000 | ZILLOW: $1,442,220 | REDFIN: $1,262,594
134 The Uplands, Berkeley | LIST: $1,595,000 | SOLD: $1,595,000 | ZILLOW: $1,908,308 | REDFIN: $1,884,549
156 Hill Road | LIST: $1,986,000 | SOLD: $2,658,000 | ZILLOW: $1,194,120 | REDFIN: $1,040,948
2339 Thackeray Dr., Oakland | LIST: $979,000 | SOLD: $1,350,000 | ZILLOW: $1,348,022 | REDFIN: $1,378,950
1484 Walbrook Dr., San Jose | LIST: $1,899,000 | SOLD: $1,850,000 | ZILLOW: $2,241,809 | REDFIN: $1,860,688 (aren't the buyers glad they didn't listen to Zillow?)
353 Lewis St., Oakland | LIST: $549,000 | SOLD: $670,000 | ZILLOW: $637,581 | REDFIN: $643,909