Whether you are buying or selling or just curious, chances are that you have looked up a Redondo Beach home on Zillow and looked at the "Zestimate" which is the Zillow site unseen estimate of the home's value. In the real estate business we refer to these as "AVMs" meaning automated valuation models. Basically, an algorithm that calculates value based on attributes like home, age, size, lot size recent sales etc. It does not take into account variables such as upgrades and market demand. As a result any AVM from any source can miss the mark by a wide margin. In fact for the Los Angeles area, Zillow indicates that their median error is 4.6%, 89.3% of homes are within 20% of the sales price, 75.8% of homes are within 10% of the sales price and 53.3% of homes are within 5% of the sales price. Wow. I'll let you calculate the implications of all that on your own but at a minimum we are looking at what can easily be tens of thousands of dollars based on current Redondo Beach sales prices.
So let's take a look at some actual properties for sale, recently sold, and in escrow in North Redondo Beach CA.
1714 Ruxton Ln # A, Redondo Beach 90278: Listed for $799,900, Zillow Zestimate $809,596. My opinion, priced about right and Zillow about right. Probably unknown to Zillow is that east of Inglewood Ave and close to the train tracks might be a drag on value or desirability. But certainly well within 1-3% either up or down.
2111 Huntington Ln # A, Redondo Beach 90278: Initially listed for $1,125,000 then reduced to $1,089,000. Zillow's Zestimate is $1,176,506 so even at the initial list price was priced below Zillow. At the current price it is less than $400 SqFt. So why hasn't it sold? My opinion a) I have seen better versions of a similar floor plan and b) when a property is larger than similar ones you may get price per SqFt distortion lowering the AVM calculation. Either way, this one should sell below the Zestimate and possibly by over 8% based on the current list price. My guess is we may be closer to 10% by the time everything is said and done.
1600 Speyer Ln, Redondo Beach 90278: Listed for $1,049,000. Zestimate is $1,071,305. I think Zillow is low on this one and it may very well get bid up substantially. It would not be unexpected to see this go 15% over list price or more. A lot more. Why? House and lot both larger than others in the neighborhood and very far west, almost to the Hermosa Beach border.
1610 Carver St, Redondo Beach 90278: Listed for $879,000. Zestimate is $937,377. I had clients interested in this listing and can tell you for a fact that the Zestimate is pretty close to where the sales price will wind up, within a very reasonable margin of error. That's one Zillow definitely got right.
3506 Blossom Ln # B, Redondo Beach 90278: This one is my listing so I definitely have the inside scoop. Initially I had advised the sellers to list for $799,000 but they wanted to go out at $825K. Zillow has it at $805,862. We quickly made a modification to my suggested price and it went into escrow shortly after. Final sales price will be within that 1% margin of error.
2505 Vail Ave, Redondo Beach 90278: Also my sale this time representing the buyers. Listed for $1,200,000. Zillow Zestimate is $1,145,907. In escrow substantially above the asking price but appraisal closer to the list price. Why did Zillow miss the mark by so much? There was no way for them to calculate the value of the improvements which were higher than the usual finish work in the neighborhood.
1539 Stanford Av, Redondo Beach 90278: Listed for $879,000. Sold for $930,000. Zillow Zestimate $888,703 (after it closed escrow for higher). How did they miss this one by five percent? Your guess is as good as mine.
2006 Graham Av # A, Redondo Beach 90278: Listed for $910,000, sold for $916,000. Zillow Zestimate is $980,292. Over 5% miscalculation. Why? House needs a lot of updates and is older variation of floor plan with some lower ceilings and other less attractive amenities. Still a great deal for the buyer who recently bought it.
2022 Rockefeller Ln, Redondo Beach 90278: Listed for $719,000 reduced to $679,000 and sold for $675,000. Zillow Zestimate $758,913. That's an over 10% differential.
So what can we conclude from all this, if anything?
Zillow is a good starting point as an indication of price but not exact by any stretch of the imagination.
If you want to know how much your Redondo Beach home is worth contact me directly for an accurate Broker's Price Opinion (BPO).