Let’s add this to the ever growing list of suspect resources available to estimate the value of your home:
The National Association of Home Builders has a home price estimator on its website. At first glance, the excel-based calculator (with the clunkiest interface we’ve seen in a while) looks like it has far too few variables to even come close to being a useful tool to estimate value. Undeterred, we thought we’d give it a quick test drive anyway to see how it stacks up against a couple of recent appraisal’s that have come across our desk.
The first test case is a new Rambler with 2 bedrooms, 2.25 baths, a pool, and 3200 square feet. Located in the Shoreview area, our appraiser estimated its value at $650,000.
Estimator Says: $307,000. This doesn’t surprise – It’s a very nice home with lots of amenities and a high level of trim. There is no way to reflect this in the estimator, so it is no wonder it missed the mark – but by $340,000?
The second test case is a recently updated circa 1922 bungalow in St. Paul with 1,000 square feet, 2 bedrooms and 1.5 baths. Appraised at about $180,000
Estimator Says: $122,409. Picked this one because we thought the calculator would have a pretty good shot at coming close here. A well maintained and recently upgraded property in a very average Twin Cities neighborhood. $122,000 does not even get you close to this house in a below average area.
Okay, I think we can stop there. As we expected – not very impressive – just far too few data points for it to even have a chance. You’d be better off taking the sales price and simply adding 8-10% per year for every year you’ve owned.
If you’d like to run your own home through the estimator, here’s the link.
Everyone is encouraged to post their results in the comments section below – let’s see if a larger sample size can redeem the horrible results our test cases returned.
Linklube
The Sum Of All Parts: What Your Home is Worth [Behind The Mortgage]
Twin Cities Regional Price/Value Data for 2004 [Twin Cities MLS]
Search Prices and Appreciation info by City, State Etc. Nationwide [Kiplinger.com]
The Roaring 2000′s – Twin Cities Home Prices Surging [Behind The Mortgage]
More Twin Cities Real Estate Data, Charts, and Graphs [MPLS Realtor Assoc.]
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1400 sqft, 3BR/2BA in central Austin, TX. Purchased for $164,500 five years ago.
NAHB Estimate: $124,752.