This is a question I get asked frequently. ..and is one, the answer of which, Zillow is constantly monitoring, and makes readily available. Zillow computes its Zestimate accuracy by comparing the final sale price of a home to the Zestimate for that home on or before the sale date. And Zestimates are automatically computed three times a week.
So how accurate is Zillow’s Zestimate? From Zillow’s website:
Nationally, the Zestimate has a median error rate of 8%, which means half of the Zestimates in an area are closer than the error percentage and half are farther off. For example, in Seattle, Zestimates for half of the homes are within 6.6% of the selling price, and half are off by more than 6.6%.
Zillow makes public the Zestimate accuracy data for every state, county, and major metro area in the U.S. For example, here is the latest Zestimate accuracy info for Nevada. [Note: If you’re a data geek, Zillow even allows you to download to a spreadsheet.]
So how accurate are Zestimates for our local market? Drilling down to Washoe County from the link above, the most recent accuracy numbers are:
- within 20% of the actual sales price 86.9 percent of the time
- within 10% of the actual sales price 64.6 percent of the time
- within 5% of the actual sales price 34.4 percent of the time
- for an overall median error rate of 7.3 percent
What do these numbers mean? Zestimates for half of the homes in Washoe County are within 7.3% of the selling price, and half are off by more than 7.3%. One-third of the Zestimates for Washoe County homes are within 5% of the actual sales price, and about two-thirds are within 10% of the actual sales price.
That’s not too bad for an automated algorithm that has never seen the property. As Zillow states on it’s site:
[A Zestimate] is not an appraisal. It is a starting point in determining a home’s value…We encourage buyers, sellers, and homeowners to supplement Zillow’s information by doing other research such as: Getting a comparative market analysis (CMA) from a real estate agent.
So, if you’d like to get an idea of your home’s value, start with Zillow; but for a more in-depth analysis, give me a call — 775-722-4011 – or send me a note. I’d be happy to help.
For much more information on Zestimates, check out Zillow’s Zestimate FAQ page.
Related post: How accurate are Zillow’s Zestimates for our market? (March 3, 2012)