How Accurate Are Zillow's Zestimates?

By
Services for Real Estate Pros with Zillow

I recently attended a trade show where the two most popular questions at the Zillow booth were 1) Where do you get your data and 2) How accurate are your Zestimates?

DataWe get data from a number of sources, but the most popular place is from county records.  In some counties this is great, in others (especially in non-disclosure states)  the data is very weak and we have to turn elsewhere.  Of particular note to Agents- we also get data from listing feeds.  Say the county said a home had 3  bedrooms, but when you post the listing on Zillow you say it has 4.  We will override he county data with your information, as we figure you are the more reliable source, and the Zestimate could change based on this.  If you want to read more about the Zestimate, please visit What's A Zestimate Value.

Accuracy  -  We constantly monitor how accurate the Zestimates are by comparing them to closed transaction data on the day the property sells.  By looking at the deltas that exist between the Zestimates and the sold prices, we can conclude our median err (or accuracy) rate.  We then publish these figures across all counties.  We are the only AVM (automated valuation model) to be publically transparent about our accuracy rates.  On this chart you'll also see the percent of times that the Zestimate was with 5, 10 or 20% of the sales price. 

This Accuracy Chart can be found at the bottom of all Zillow pages as a light gray link called Zestimate Values & Accuracy. Click on the link, then click on States/Counties and scroll to your area.  So when we were asked this question, we simply went to the Accuracy Chart, looked up the accuracy rate, and gave a straight answer. 

This accuracy rate can also effort the Value Range we have on many of the 80 million homes found on Zillow.  If the accuracy is low, the value range spread may be much wider than if the accuracy were high.  Having the value range on properties at all is a good indication to folks that the Zestimate isn't an appraisal, but rather a starting point and thus the need for a range. 

Many Agents said this chart was very helpful because they work with clients who will say "but Zillow said..." about a home's particular price.  Now they can come back and say "but Zillow also said that they have an err rate of XX% in our county" and have the numbers to prove this. 

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Re-Blogged 6 times:

Re-Blogged By Re-Blogged At
  1. delete account 12/24/2008 04:32 AM
  2. Peter Testa 12/24/2008 04:21 PM
  3. Tim and Pam Cash 12/26/2008 11:52 PM
  4. Dane H. Ginsberg (Your Trusted Mortgage Advisor) 05/03/2010 08:34 AM
  5. Joe Metzler 05/03/2010 09:43 AM
  6. Joseph Metzler 05/03/2010 09:44 AM
Topic:
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Rainmaker
411,839
Andrew Monaghan
The Monaghan Group - Glendale, AZ
CRS, GRI, EPro Associate Broker

They are a joke in many areas of Phoenix

Dec 25, 2008 05:51 AM #73
Rainer
73,635
Bruce & Mary Smith
Savannah Lakes Homes - McCormick, SC
REALTORS, Savannah Lakes Village McCormick SC

I haven't seen much information that is accurate for our area.  It's a useful tool in many ways but not always correct.

Dec 25, 2008 08:10 AM #74
Rainer
20,546
Andy Piper
Ann Arobr real estate-Piperpartners.com - Ann Arbor, MI

Thanks for the post on Zillow.  Zillow estimates are not too accurate.  Give Zillow lots of credit for the work they are doing and they are a great data source  for home buyers and sellers beginning their research.  I have seen wildly variable number for Ann Arbor real estate.  Get information from experienced Realtors that know current market conditions.

Dec 25, 2008 01:39 PM #75
Rainmaker
122,824
AMBER NOBLE GARLAND - Top Real Estate Expert, Property Tax Appeal Specialist & Author
Strategic Marketing Expert & Relocation Specialist Serving New Jersey and nationwide! - Marlboro, NJ
- The Agent You Can Trust To Deliver REAL Results!

Hi Sara. Not sure if you remember me, but I was one of those agents who came up to you at the "Triple Play" real estate convention in Atlantic City, NJ and told you about my Zestimate gripe. Remember, I have the waterfront listing with panoramic views in South Amboy, NJ listed for $1,875,000 who has a buyer who wanted to make up his own price because "Zillow told him the home should be valued at lower price?" Thanks for turning me on the margin of error link on the site. I will definitely be using it going forward with buyers especially.

Dec 25, 2008 02:05 PM #76
Rainer
42,917
Brian Griffis
Realty Choice - Springfield, MO

Remeber that estimates are just that. Real estate is always a very localized affair and overall estimates never tell the whole story, but they are a place to start.

Dec 25, 2008 02:29 PM #77
Rainmaker
732,603
Eileen Hsu
Douglas Elliman Real Estate - Manhattan, NY
LICENSED REAL ESTATE SALESPERSON

I think the Zillow gives buyers or the sellers some ideas of their home value. However, at times with manhattan Real Estate market there are sometimes a huge gap in price difference... It may have to do with the fact that we do not have MLS here in New York city.

Dec 25, 2008 03:11 PM #78
Ambassador
296,340
Tim and Pam Cash
Crye-Leike (Sango) - Clarksville, TN
Real Estate Professionals - Clarksville TN

Sarah, Zillow is very close in this area. 

Dec 26, 2008 11:53 PM #79
Rainer
132,319
Jon Wnoroski
America's 1st Choice RH Realty Co., Inc. - Green, OH
Summit County Realtor

Hi Sara - I have checked zestimates of homes sold in my market area and find Zillow to be off by quite a bit.   When I look at comparable properties I'm finding the comps include active properties, withdrawn and expired properties, and some sold properties.  In my area Zillow reports a 10% + margin of error.

Dec 27, 2008 10:15 AM #80
Rainmaker
1,516,786
Lyn Sims
RE/MAX Suburban - Schaumburg, IL
Schaumburg IL Real Estate

Zillow is total nonsense!  By the time you get the public records of closings your already how many days past?  That's not exactly what technology and the public is expecting is it?  Old info & not too accurate.  Yikes +/- 20%?

Dec 27, 2008 11:53 AM #81
Rainmaker
178,183
Kevin Vitali
EXIT Realty- Massachusetts Short Sales & Residential Sales - Tewksbury, MA
Helping Massachusetts Home Buyers and Home Sellers

I find Zillow to be accurate for very homogeneous properties for the area.  Basically are there a lot of similiar properties in similiar locations and similiar fit and finish.  Once you deviate from that there is no interpretation of the data and the Zillow numbers go askew.

Dec 29, 2008 01:53 AM #82
Rainmaker
121,073
Spencer Rascoff
Zillow - Seattle, WA

Spencer from Zillow here.

What a great discussion. Sara, thanks for the post. And thank you all for the comments.

I want to echo what several Realtors have pointed out: Zestimates are just a starting point, not the ending point in determining a home's value. That's all they're intended to be. Anyone who stubbornly believes that a home is worth exactly what a computer-generated Zestimate says, despite possible evidence to the contrary, is just plain wrong. There are of course many many homes where Zestimates are spot on, but there are also homes where the Zestimate is not even close. I'm going through a refi right now and my appraisal came within 0.1% of the Zestimate, both of which I think are pretty much spot on. So my house in Seattle seems to be pretty darn accurate, as is my in-law's place in LA and San Diego. But my parents' place in La Jolla.... oh don't get me started. My parents' never let a week pass without telling me that their Zestimate is too low.

We've always been very transparent about our accuracy statistics, as Sara points out. The accuracy chart is actually one of the most visited pages on our website, and with good reason. And the value range next to each Zestimate is important also.

The advice I'd give to a Realtor worried about an inaccurate Zestimate is to use it as an opportunity to show off how smart you are, at the expense of the computer algorithm. "Yeah yeah, that computer thing is all fine and good, but let me show you how my local market knowledge and specific understanding about your particular house can help us arrive at an even more accurate value of your home." In fact, many agent and brokerage websites actually choose to put Zestimate functionality onto their website for just this reason. They use it as a sort of light lead gen tool -- enter your address to get a Zestimate, and now if you want to talk to an agent about this please click here. Check out Prudential California's website, for example, or Southern Winds (a Charlotte brokerage).

As several of you pointed out, an owner or an agent can also "claim a home" and then publish their own estimate of the home's value. It's a little template wizard thingy where you can choose your own comps, add in your own home improvement information, etc, and it recalculates a value. You can then publish that to the site, if you want. In addition, you can change the home facts (e.g., # Beds, # baths, sqft, etc) and these changes actually affect the Zestimate itself. Millions of users (homeowners and agents) have done this. So if you have a listing and the Zestimate is troubling you, the best thing to do is to make sure that it's listed properly on the site, with the corrected home facts (which will improve the accuracy of the Zestimate). And if you want, to use the "My Estimator" tool to publish your own estimate of the home's value, or you can have the owner do it if you think it's sketchy for an agent to opine on a home's worth.

The most important thing to remember is that there are over 80 million homes listed on Zillow, almost every home in America. Unlike every other real estate website, we already have a webpage for pretty much every single home in the US. If it's posted for sale on Zillow (either via a brokerage feed or by an individual agent), then the Zestimate comes off of the map page entirely and it's replaced by the listing price, and the Zestimate gets bumped all the way to the bottom of the home's details page -- it's the For Sale price that's listed up top. So the advice I give to agents who think one of their listings has an inaccurate Zestimate is to make sure it's listed properly on Zillow, so the Zestimate gets bumped down and the gorgeous photos (of the home and of the listing agent, of course) are on the home's page. You can learn more about listings here.

 

Anyway, thanks everyone for the discussion. Something tells me this isn't the last time it will come up!

 

Happy New Year,

spencer

Dec 30, 2008 08:56 AM #83
Rainer
212,769
Tony Anderson
Century 21 Community Realty - Habersham, GA
Realtor - Serving Habersham Banks, White & Hall Co

A Zestimate would not be good to go by in my area.

Feb 09, 2009 09:37 AM #84
Rainer
34,612
Lee Ali
Las Americas Real Estate - Fairfield, CT

With all the emotional outpouing against Zestimate, Zillow must be on to something. :) I don't use Zestimate for valuations. I use it for price trends.

What Zillow is doing is the future of valuations. It is just a matter of time.

Banks don't use appriasals for valuations. They use them as justification for what they want to do anyway. If they don't want to do the loan, correct appraisal or incorrect appraisal, they will find something to reject the deal altogether.

Lee

BanksFreeInvesting.com/blog

Mar 16, 2009 04:09 PM #85
Rainer
34,612
Lee Ali
Las Americas Real Estate - Fairfield, CT

The real estate industry has thrived on hiding information from buyers. In the age of total disclosure of Facebook, Twitter, MySpace, etc., secretive MLS and even appraisals may be toast. It's just my guess.

There was a time when I used to wish that buyers, coming to see my listed properties, did not know about Zillow. At that time selling prices were higher than what Zillow would show. Zillow is a private company. In a free-market economy, they can present any information they want to present.

NAR seems to be very proud of being a seller-representing organization. Even in 2008, agent-assisted houses sold for 26% more money than a FSBO. http://www.realtor.org/research/commentary_falling_fsbo Isn't this "interesting" that real estate agents are so enamored with the word "SOLD," and not with "BOUGHT."

Real estate agents MUST understand that banks don't care about them when they show up as buyer agents. Heck, banks don't care about the buyers either. Bank of America is amusing itself with one of my buyers. :) They accepted an offer with a certain closing date. Since BofA has the price locked, they are now negotiating on the closing date even though I specifically told them that the client needs longer closing date.

Realtors will have to show respect to the all-empowered buyers, or...

Lee


Lee Ali is the author of "Crowdfunding: The Solution to Eliminate Booms and Busts in Real Estate Forever!”

Mar 17, 2009 06:35 AM #86
Rainmaker
1,079,273
Sharon Alters
Coldwell Banker Vanguard Realty - 904-673-2308 - Fleming Island, FL
Realtor - Homes for Sale Fleming Island FL

Sara, found this post when reading another on Coutrywide using Zillow. Thanks for the clarification about Zillow's sources and info on the accuracy. ~Sharon

Mar 17, 2009 08:43 AM #87
Anonymous
Class Action

As an active real estate investor, I can say that Zestimates are normally completely ridiculous, particularly in areas that aren't totally homogenous.  Who knows what actually goes into the calculation, but my guess is it is the same inane "price per square foot proximate to other recent sales" model that got the US real estate market into all the trouble in the first place through inflated valuations.  Now the opposite is true--Zillow consistently underestimates the market price of homes in our area because of the number of distressed sales and low end housing that is close to very high end real estate.  How can Zillow account for quality of landscaping, flow of the house, utility, functionality, or just plain curb appeal.  Of course it can't.  I believe a good law firm should look into the efficacy of forcing Zillow to open up its calculation methods to the public, and not only that, perhaps Zillow should reimburse all the folks for its innaccuracies and undervaluations that are costing average homeowners tens of thousands of dollars when they go to sell their houses.  It's one thing to say in fine print that basically the Zestimate is irrelevant, but give me a break, every single buyer on earth--including me--uses that number to beat down the seller.  Zillow should be forced to at least explain its methodology and not just throw numbers out there.

Aug 14, 2009 03:38 AM #88
Anonymous
Corey Armstrong (re investor)
Regardless of how accurate any of these websites are doesn't even matter. These are great tools but what really matters is FMV(fair market value). Definition(FMV): What a competent seller is willing to sell for, and what a competent buyer is willing to buy for. Plain an simple. That's fair. One time I bought a house for 250k when realtor and zillow comps said it was only worth 190k. Why would I do this? Because I knew I could sell it for 270k, and I did. 20k in the hip national bank. So be competent, and do your homework.
Jan 11, 2011 03:27 AM #90
Anonymous
Rusty Scalf

Zillow estimates; My place vs next door. No upgrades or changes to either.

                       Mine       Next Door

   Year Built        1921     1910

   Sq Ft               912        826

Lot Sq Ft           3700       4000

    Date      Zillow estimates in thousands

Dec 1, 2006       $526       $539

Dec 1, 2007       $552       $534

Dec 1, 2008       $387       $421

Dec 1, 2009       $437       $417

Dec 1, 2010       $387       $389

Jan 1, 2011       $367       $494

Feb 1, 2011       $344       $551

Mar 1, 2011       $348       $567

Apr 1, 2011       $338        $577

May 1, 2011      $318        $579

Jun 1, 2011       $300        $414

2771 Dohr St, Berkeley, CA 94702

2769 Dohr St, Berkeley, CA 94702

 

Jul 15, 2011 12:16 PM #91
Rainmaker
178,183
Kevin Vitali
EXIT Realty- Massachusetts Short Sales & Residential Sales - Tewksbury, MA
Helping Massachusetts Home Buyers and Home Sellers

I think it has been re-iterated that Zillow House Values or Zestimate is a starting point when you have a thought of putting your home on the market.  When it is time to get serious, it is time to call your local Realtor.    I recently did a post on the Zestimate accuracy and found in my community it was on average about 6.2% off leaving an average of $22,000 per home on the table.

Jul 08, 2014 03:41 AM #92
Rainmaker
1,482,446
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • Green • GRI • HAFA • PSC Calabasas CA

Information from the sites like Z. is based on a limited set of facts about a house, such as square footage an number of rooms. However, those AVMs may miss important factors, like  a desirable school district, view, noisy street exposure, privacy, etc. You have to compare the subject property to identical or similar and make all proper adjustments since rarely properties are the same( condition, location, layout, sqft, etc.)

Nov 04, 2017 11:05 PM #93
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