Did your home lose value over the past 5 years? Yes. Did your home lose value overnight? According to Zillow.com, probably.
On June 14th, the real estate website Zillow.com issued a press release stating that it had "modified the formula it uses to estimate the value of some 97.3 million American homes to expand the coverage of its database of homes and improve accuracy." Zillow's estimate of value for residential properties throughout the country is cleverly labeled the "Zestimate." With the change in their formula, Zillow.com added 25 million new Zestimates, incorporated user-submitted data about improvements and gave greater weight to more recent sales data.
It seems for homeowners in Phoenix, Mesa, Scottsdale, Gilbert and other Valley cities, that Zestimates may have adjusted downward overnight. The Wall Street Journal wrote a good article describing the changes.
Regardless of what the Zestimate is for your home, a full-blown appraisal is still the best way to determine what your home's value is. Better still though, the best way to determine the value of your home is to put it on the market and solicit offers. If, like most homeowners who purchased their homes in the past 8 years, your home is underwater or you are concerned about your home's value in relation to the balance on your loan, contact us to discuss your options and your potential liability.