Boston luxury condos for sale: Are online valuations accurate? As technology becomes more advanced, the rules of downtown Boston real estate continue to change.
Today, we have innovations that have propelled us into new territories. With the advent of new technology comes new ways that agents have to adapt, or improve. One of these key pieces of technology is the online homes estimate or valuation.
Made popular by sites such as Zillow, Redfin, and Trulia, online estimates seek to provide the Boston real estate client on what their Midtown high rise condo is worth. The convenience is undeniable, but the same can’t be said about the accuracy.
These sites became popular for homeowners who are just beginning their Boston condo for sale process. Some just want to “check the market.” Perhaps they are mulling over the possibility of selling their Seaport luxury condo
There is no question that these are very popular sites and they are very good for searching homes that are available for sale in your local neighborhood. Here is the problem, however, with these sites. All of these websites have an algorithm and they determine the value of your home based on price per square foot in the area. Sounds simple enough, right? What could be wrong with this? Answer they aren’t correct. Let me explain.
The data is uniform and isn’t actually based on a carefully put together appraisal based on anything “tangible.” It’s not as if there are thousands of little drones all equipped with Artificial Market Intelligence sweeping through each property and generating some sort of educated estimate. Automated systems are responsible for generating a predictive estimate all on their own without any oversight from humans with market knowledge.
Keep in mind, this computer-generated software isn’t looking for future movements. So anything that is going on off market in your area isn’t going to be covered.
The computer’s prediction isn’t focused on any hard and fast data, other than patterns.
Again, this article isn’t intended to denigrate these easy-to-use services, I just wanted to lay out the facts for future Beacon Hill luxury condo buyers and sellers who may be reading this so that they are aware of the how these systems work.
A downtown Boston real estate agent will be the best source for clients who want to know the ins and outs of the market in question. Automated data and generalized findings aren’t the surest path to getting a proper estimate.
Proponents of this thinking claim that by skipping agents and going straight to online estimate tools, clients may have inflated numbers in their heads. Since this is their first impression of the market, it can leave clients feeling misguided. This can also set you up for huge disappointments down the road, when your agent tells you that you aren’t going to be getting an unrealistic fairy tale price for your home.
These services rely heavily on computer algorithms that have been pre-programmed to scour data and look for patterns. Operating a system of predictions based on patterns seems like it would be a good idea, and in theory it seems very sophisticated, at least on the surface. However, one of the major things to consider is that real estate isn’t just a system of patterns and fluctuations. It isn’t as cut and dry as certain aspects of the financial world. There are obviously patterns and predictable fluctuations, but these happen based on aspects of the market that typically aren’t perceptible to a computer program.
When you consider that the value a Boston condo has changes over time, computers who are looking for patterns may be able to make sense of data, but they are relatively poor judges of which data is most important in the sale of real estate.
In order to be able to truly read a pattern, you need to have years of experience with markets and have some knowledge of predictable trends that occur throughout time. Without this background information, it can be really hard to understand what is going to happen–even for a computer.
Even if you live in the same Midtown high rise building, condominiums can have widely different qualities that make the price of the home differ substantially. When using the computer’s algorithm, it can’t input a price adjustment for special amenities, or spectacular features.
Online estimate leader, Zillow even explains this on their website where they state:
“We do not know about home values and remodels, unless they have been reported to the local tax assessor, so those values are not used in Zestimate calculations.”
Other factors such as your gorgeous skyline view, for example, will not play a factor in determining the estimated price. Getting a great estimate is as simple as picking up the phone and calling a real estate agent.
I must confess I do like these websites, for searching for homes that are available. However, I recommend being careful because they are usually incorrect when determining the value of a Back Bay luxury condo.
I honestly don’t believe that these types of online services were meant to detract from an agent’s job. In fact, I think it actually does the opposite.
Zillow CEO, Spencer Rascoff, had this to say, “you need a real estate agent, regardless of whether you’re a buyer or a seller. It’s an infrequent, emotional, complex transaction. Having a great person at your side can be really valuable.”
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