To follow up on my previous post: I’m fairly certain that they made some recent changes to their algorithm. I bet that what they’re doing now is that the price of a house is influenced more by the prices of nearby houses (say, within a 200 yards radius, for example). The $800K house in my example happens to sit at the edge of the subdivision, with cheaper townhomes on the other side. The identical (actually, sligthly worse) $1M house sits at the other end, a bit closer to more expensive houses. While it makes some sense to consider the prices of nearby houses, it seems that they’re now giving this factor way too much weight in their formula.
