Zillow home values lag the real market.
When prices are dropping, Zillow Zestimates don't drop soon enough.
When prices are rising Zillow Zestimate don't rise soon enough.
Right now prices are rising in the good school districts of Silicon Valley, so Zillow Zestimates are too low. A Zestimate is just a prediction of the market value. However, the true market value is what a willing buyer willingly paid to a willing seller for the house.
For 10791 Brookwell Drive, Zillow shows a Zestimate of $875,000. However, on the open market, this house sold for $938,000. The actual sales price, and thus market value, was 7% above Zillow. Zillow is behind. Zillow underestimates the actual market value by 7% in this Castlewood neighborhood right now.
Assuming Zillow's formula is offset approximately the same percentage in the same neighborhood, a reasonable guess is that 6397 Myrtlewood Drive is worth approximately 7% above the Zillow Zestimate price. Since the Zestimate for 6397 Myrtlewood Drive is $912,200, if it's true market value is 7% higher, then 6397 Myrtlewood Drive is worth $977,878. The listing price of $970,000 is just 6% above the Zillow Zestimate, so is reasonable based on comparison to 10791 Brookwell Drive, which sold 7% above Zillow.
The spreadsheet showing both is in this Excel Workbook.
Showing posts with label Castlewood. Show all posts
Showing posts with label Castlewood. Show all posts
Friday, May 11, 2012
Case Study Cupertino Castlewood Neighborhood up 20% over mid 2005 prices
Many people say that during a real estate downturn, houses in good school districts keep their values better. Rather than simply trust this logic, I performed a Case Study.
People say that sometimes statistics are manipulated by cherry-picking statistics that show their intended viewpoint. For instance, data might show housing prices in Sunnyvale increasing by 35%, but maybe that upward shift in prices is simply because more homes are being sold in the more expensive southern part of Sunnyvale rather than the less expensive northern part of Sunnyvale.
To avoid the scenario above, I had to concentrate on one specific neighborhood. I chose the Cupertino Castlewood Neighborhood. This is the quiet neighborhood northwest of the intersection of Miller and Bollinger. The schools in this neighborhood are Eaton Elementary, Lawson Middle, and Cupertino High.
However, even if I restrict to the same neighborhood, the increase in prices might still be due to the change in mix of which particular houses sold. To eliminate even this argument, I looked at two specific houses in the Castlewood neighborhood -- 10791 Brookwell Drive and 6397 Myrtlewood Drive.
Looking at their historical sales price trend, I extracted the data and entered them into an Excel spreadsheet. You can see that 10791 Brookwell Drive sold for $806,000 on 12/1/2005 and actually rose 16% during this downturn to actually RISE in price to $938,000 on 4/12/2012. These are not Zillow predictive prices. These are ACTUAL sales prices. A buyer was actually able and willing to pay $938,000 last month for a house that they knew sold for just $806,000 on 12/1/2005, back in one of the peak years. Based on 10791 Brookwell Drives prices, the asking price of 6397 Myrtlewood Drive of $970,000 is a very close estimate of what 6397 Myrtlewood Drive SHOULD sell for. The $970,000 asking price is a reasonable 21% over the same property's late 2005 price.
To show this continued rise in home values in Cupertino, I plotted the actual sales data in a 10791 Brookwell Drive Chart and a 6397 Myrtlewood Drive Chart. Even during this downturn in real estate, Cupertino Castlewood Neighborhood values are up 20% over mid 2005 prices.
People say that sometimes statistics are manipulated by cherry-picking statistics that show their intended viewpoint. For instance, data might show housing prices in Sunnyvale increasing by 35%, but maybe that upward shift in prices is simply because more homes are being sold in the more expensive southern part of Sunnyvale rather than the less expensive northern part of Sunnyvale.
To avoid the scenario above, I had to concentrate on one specific neighborhood. I chose the Cupertino Castlewood Neighborhood. This is the quiet neighborhood northwest of the intersection of Miller and Bollinger. The schools in this neighborhood are Eaton Elementary, Lawson Middle, and Cupertino High.
However, even if I restrict to the same neighborhood, the increase in prices might still be due to the change in mix of which particular houses sold. To eliminate even this argument, I looked at two specific houses in the Castlewood neighborhood -- 10791 Brookwell Drive and 6397 Myrtlewood Drive.
Looking at their historical sales price trend, I extracted the data and entered them into an Excel spreadsheet. You can see that 10791 Brookwell Drive sold for $806,000 on 12/1/2005 and actually rose 16% during this downturn to actually RISE in price to $938,000 on 4/12/2012. These are not Zillow predictive prices. These are ACTUAL sales prices. A buyer was actually able and willing to pay $938,000 last month for a house that they knew sold for just $806,000 on 12/1/2005, back in one of the peak years. Based on 10791 Brookwell Drives prices, the asking price of 6397 Myrtlewood Drive of $970,000 is a very close estimate of what 6397 Myrtlewood Drive SHOULD sell for. The $970,000 asking price is a reasonable 21% over the same property's late 2005 price.
To show this continued rise in home values in Cupertino, I plotted the actual sales data in a 10791 Brookwell Drive Chart and a 6397 Myrtlewood Drive Chart. Even during this downturn in real estate, Cupertino Castlewood Neighborhood values are up 20% over mid 2005 prices.
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