Alyssa Abkowitz of Smart Money magazine does a terrific job of describing the faults with the online software valuation of residential real estate. Websites such as Zillow, Homes.com and Realtor.com continue to try to armchair quarterback home prices using a mix of primarily public record data, MLS's and user provided information.
She does nice work of covering the issues but could emphasize the situation we have here in Incline. This primarily second home market contains many custom homes built over a number of years. That often leads the algorithms astray. The less homogeneous the constructions has been over the years, the more inaccurate the models become.
In tract home markets, where a larger population of homes have been constructed, within a shorter period of time, and there is a relatively active MLS market, the software models work best.
Check out this link for the full story... THE FUZZY MATH OF HOME VALUATIONS.
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