I get this question a lot from clients. Fortunately, there’s an easy answer as Zillow posts the accuracy rates for its zestimates by state, county and city. But first, what is a Zestimate®?
From Zillow’s site:
The Zestimate® home valuation is Zillow’s estimated market value, computed using a proprietary formula. It is not an appraisal. It is a starting point in determining a home’s value. The Zestimate is calculated from public and user-submitted data, taking into account special features, location, and market conditions.
Zillow continuously calculates its Zestimate accuracy by comparing the final sale price of a home to its Zestimate on or before the sale date.
Across the U.S. as a whole Zillow’s zestimate accuracy currently has a median error rate of 4.3%. This means half of the estimated home values are within 4.3% of the selling price, and half are off by more than 4.3%.
Drilling down to the state level, for Nevada for example, we find the zestimate’s accuracy improves with a median error rate of 3.0%. Again, this means half of the home values are within 3.0% of the selling price, and half are off by more than 3.0%.
Drilling down even further, to the Washoe County level, we find the zestimate’s median error rate also to be 3.0%. We also see that two-thirds (66.6%) of the time the Zestimate for a home in Washoe County was within 5% of the selling price. And 83.3% of the time the Zestimate was within 10% of the selling price.
Have you recently sold a home in the area? If so, share how accurate Zillow’s zestimate was in the comments below.
Regardless of the accuracy of the Zillow Zestimate®, keep in mind a zestimate is simply one source (Zillow) of data. In fact, on the Zillow Zestimate Accuracy page, Zillow states: “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.”
Thank you and make it a great day!