Can AI Accurately Value Your Home on Vancouver Island? Why There’s More to It Than a Number

by Maegan Morton & Loralee Burns

AI is becoming part of almost everything we do and real estate is no exception. With a quick online search, homeowners can find estimated property values in seconds. We've had quite a few clients share their AI generated property value and know many people are jumping on the trend. It’s convenient, easy to access and tempting to treat that number as an accurate reflection of what a property is worth.

But here’s the catch: an AI-generated estimate is not the same as an accurate market valuation because AI is not always accurate.

AI can be a useful tool for gathering information and identifying trends. We use AI in our business and believe there are many areas where it’s beneficial, in fact we used AI to help draft this write up. But when it comes to determining what a home or property is actually worth, there are some important limitations to understand.

AI Tells You What You Want to Hear

AI tends to give answers that reinforce what you already believe or hope is true. If you're hoping your property is worth a certain amount, AI will find ways to support that expectation, even when the market data doesn't. Also, homeowners tend to place a higher value on their home and property features than buyers do. This combination ends up with a suggested list price that is not necessarily accurate . A valuation by a reliable REALTOR® isn't always the number you want to hear, but it's the one that helps you make informed decisions.

AI Does Not Have Access to Relevant Sold Data

One of the biggest challenges with your AI generated valuation is access to accurate, up-to-date SOLD data information.

There is an important difference between the listing price and what a property actually sells for. We use sales data from comparable sold properties, which is the most accurate assessment of value and is information that AI does not automatically have access to. Without this, what AI is saying your property is worth is not the complete picture.

Acreages Are Even More Complex

On Vancouver Island, acreage values depend on much more than the number of acres. Land quality, topography, water supply, wells, septic systems, zoning, ALR status, outbuildings, potential uses and area desirability all affect value. Understanding these differences requires local knowledge and research that AI can only help with on a general level. In fact, we find that AI is almost always incorrect about regulations and the value of these features.

Every Property Is Different

Two homes with similar square footage and features can have very different values. Renovations, condition, layout, views, privacy and overall appeal all influence what buyers are willing to pay. These details aren't always captured in publicly available online records or understood by an automated valuation. We have seen AI generated pricing come in fairly accurately to wildly inaccurately.

When figuring out a listing price, we know how various property features add or subtract value, which AI is not able to accurately factor in. For example, a new kitchen increases the listing price, but doesn't automatically add its full cost to a home's market value. Similarly, a large shop or barn may be valuable to the right buyer, but its contribution to the price depends on how buyers view its usefulness.

So Is AI Useful for Real Estate?

Absolutely. AI can help organize information, summarize market trends and calculate quickly. The problem isn't using AI, it's relying on an automated estimate as though it were a professional valuation.

We use AI as an added tool in our property valuation process and believe we have a better researched product because of this, however, we don't simply ask it to generate a number and accept the result. We provide relevant sold data, comparable property information and specific metrics, then review the analysis and check its accuracy against our human powered valuation. We combine those findings with our knowledge of the local market and the property's unique features. This combination results in us being able to provide you with the most well researched and accurate information on what a buyer is likely going to pay for your property.