Rising prices make it harder to estimate what a house is really worth

The median sale price of an existing home rose to a record $350,300 last month, according to the latest report from the National Association of Realtors. Sales of existing homes fell in May for the fourth straight month as competition for the few homes available continued to push up prices. Last week, Zillow announced an update to its tool for estimating home values, saying the changes allow its algorithm to “react more quickly to market trends.” Marketplace’s Amy Scott spoke to Norm Miller, a professor of real estate finance at the University of San Diego and a consultant to companies that create automated valuation models for banks and the government.