[Ed. Note: A more recent blog post on this topic (published December 26, 2017) can be found here: How Accurate is Zillow’s Zestimate?]
…More accurate than you might think.
Zillow’s Zestimate accuracy is computed by comparing the final sale price to the Zestimate on or before the sale date. Zestimate accuracy is compiled for, not only the top metro areas nationally, but also by state and county. The results are updated quarterly and then posted for anyone to view here. Zillow also allows consumers to download a spreadsheet of all the data.
So, back to the accuracy question. Looking at Zillow’s most recent data, I see that Zillow has more than 106 Million homes on its site, and has provided Zestimates for over 98 Million of those homes. The accuracy of those 98 million Zestimates?
Zillow reports that their Zestimates nationally are:
- within 20% of the actual sales price 74.5 percent of the time
- within 10% of the actual sales price 52.1 percent of the time
- within 5% of the actual sales price 30.0 percent of the time
- for an overall median error rate of 9.4 percent
How does the accuracy of Zestimates for homes in Washoe County compare?
Zillow reports that their Zestimates for Washoe County, Nevada are:
- within 20% of the actual sales price 83.7 percent of the time
- within 10% of the actual sales price 64.0 percent of the time
- within 5% of the actual sales price 41.9 percent of the time
- for an overall median error rate of 6.5 percent
A 6.5 error rate is not too shabby, especially considering that Zillow’s Zestimates are produced utilizing mainly public data, and never having seen the properties on which they Zestimate.
booch221
Zillow is worthless. When the site first debuted years ago they had every address on my street off by one house. When you got to the end of the street the last house had no address! I contacted them time after time, year after year to correct this, they never responded once.
They say they rely on local government property tax records, but manage to get even this information wrong.
Garbage in, garbage out…
Tim
Booch,
I tend to disagree. I’ve gotten alot of value out of Zillow. I especially like being able to use it on my smartphone, so I can use it to get a ballpark figure on a neighborhood, or even a specific house.
In my experience, the Zillow estimates are pretty good. The values it places on my house and my neighbor’s house seem reasonable. FWIW.
Sully
Right now zillow seems to be spot on, however when the market turns up I expect to see zillow still showing the market declining, just like it showed the market increasing or stable when the market first turned down.
As far as addresses go, I think there is a bad database floating around somewhere. I just got a new Nav DVD for my Lexus and tried to input my address. It told me that address didn’t exist on my street! So I parked in the driveway and hit ‘mark location’ and it gave me the right street but house number was 4 higher than mine.
Alison Donofrio
Accurate??? Well I suppose, considering they say that their estimates are within 20% of the actual selling price? Sure, thats easy, after all 20% of 200K is 40K!! Its not too hard to be that close is it?
Don
I have followed zillow’s zestimates and ranges for about 2 years now. I only follow zip codes 89509, 89519, and 89511 and in my experience have found in the past year very close zestimates about 95%+ of the time. I will watch a home for sale, whether reo, foreclosure, or regular sale, and when the sale is completed, the price has inevitably been reduced and closed at only 1 or 2 percent off the original zestimate when first listed for sale. Most all homes for sale in my neighborhood (SW Reno) will sit forever until the price has been reduced to almost an exact zestimate and presto the home is pending/sold. Eerie to say the least.
Guy Johnson
Thank you for your comment, Don. Interesting observation.
Pete
Zestimate is very inaccurate. I live in a large division and there are many sales that data is available. It shows in 2006, my home was worth $2.3M. No homes here sold for that much even the few custom mansions on the hills. Track homes never crossed $1.5M and many of them are bigger than mine. The numbers are more reasonable now, so I guess it does better in flat slow moving market. The market wont stay like this forever. Estimating based on a flat line isn’t really hard. It looks like 150% error rate on my house rather than 20%. Furthermore 20% is quite bad in real estate. How many of us bought their homes 20% over market?
DC Raleigh
Zillow’s estimates are a load of crap! We just refinanced our home with a local Credit Union, getting away from the monster bank, and here where the results:
Purchased home in 2008 (brand new) for $160,300.
Appraised January 2012 (refinance) for $159,000.
We were approved for a rate of 4% on a 30 year fixed. Down from 6.5% on a 30 year fixed with big fat bank.
Zillow values our home at $127,000.
Seriously? Do you expect that a Credit Union would make a $32,000 calculation error? You can’t take Zillow’s estimates to seriously. Obviously if the CU had appraised it for $127,000 we wouldn’t have gotten the refinance.
Additionally, a good friend of ours noticed that we were running out of space (had out second kid) and happens to be a premiere real estate agent in the area and said that he could easily get $1400-$1550 in monthly rent for our home. Zillow valued our rent at $609. So there you have it…Zillow is out of touch with the reality of the market…at least in Raleigh, NC.
Tim
DC Raleigh,
Dude, you’re smokin dope if you think your house has lost no value since the top of the bubble in early ’08. Just because the bank refi’d you at that amount, it doesn’t mean a buyer will pay you that amount. Have you bothered to look at recent sales comps? Get over yourself.
Uncle Tom
This is a very interesting topic; I have had some experience studying this and I would like to share this information with you.
I regard Zillow as a helpful ESTIMATE not an appraisal. Importantly, one must recognize the limitations of any automated approach using a base or starting point, and then applying rules through an algorithm to adjust that base to arrive at an estimate. In the case of Zillow, public records of assessed valuation creates a base upon which the algorithm does its work. That base point can be an appropriate starting point, IF the property concerned has a sales history which in most jurisdictions will impact the assessed value of that property. The base point is adjusted based upon sales history, public records creating a newer assessed valuation, and then the valuation formula applies sales comps and other factors in the software, to adjust that value to a best estimate of current value.
However, suppose an automated system tries to do this with a property with no sales history, and suppose further that this is in a Proposition Thirteen type of jurisdiction, where sales of neighboring properties don’t change the assessed value of the property being studied–only a sales history for that particular property itself changes its assessed value. The formulation software then pulls that old historic number from the records, and the algorithm applies its factors. But the starting point is so artificially low, that it can become difficult for the formula to work realistically. Illustration: my house, in California, owned by me for 35 years, no sales, no reassessments. Neighbors who bought into the community in the past ten years have paid several times over what I paid, resulting in new and updated assessments for their houses. But those sales don’t change my home’s assessed value– which fortunately helps me with property taxes, but as to a starting point for an automated valuation formula, the assessed value is still the old number, with just some minor trending allowed under our law that affects taxes but not really assessed value much at all.
Then applying the comps and other factors in the formula, the result is an increase over original value, but the starting point is so low that the formulation cannot work effectively, in my opinion, to reach the true current value. This is because there is no recent basis or starting point, and the formulation factors thus have difficulty catching up with time and reality of the marketplace — for this house.
I believe that Zillow has made some adjustments to address this–I certainly have discussed it with them–and I think it works better now than it did about three or four years ago. However, in my opinion, their formula, and probably any automated formulation, becomes difficult to accurately apply when there is no sales history providing a new starting point for a house being valued.
Another factor that in my judgment throws off automated systems is the way a formula reaches out for sales comps within a defined radius, and applies them even if the radius extends beyond a community boundary. The formula doesn’t necessarily know when the rules as to a radius cross a boundary between areas, with different demos, different community names, different crime rates, and so forth. Some of those things can be plugged in, but you began to add subjective factors when you do so, and it is understandably hard to quantify these items into factors discernible by a computer program. If the radius of a comp parameter in any automated system instructs under a particular code that weighted factor 2Xg is to be given to a sale within six months and within 1/4 mile, but that 1/4 mile puts you into a different community across the railroad tracks, with different demos and sales comps, then your house is being compared to a house that indeed was sold, but actually isn’t comparable. Just a different community name alone can be worth a significant sum in terms of valuation.
I think Zillow is a good starting point, but sometimes adjustments that should be made by one utilizing it can be significant, in my opinion. There is no substitute for human intelligence and experience, in observing a lack of sales history, looking at comps across a highway in another community, then discounting their weight, and so forth. The Zillow staffers have been courteous and responsive in communications with me on these subjects, I think it is only a truism that human intelligence must be applied to any automated estimate that a computer program creates. Zillow mentions on its site, the last time I looked, that their estimate is a starting point not an appraisal, and adjustments might be appropriate to arrive an an estimate. They also do seem to be adjusting things periodically, I have seen improvement in accuracy over time. Note also that they provide a range of estimated value, and the actual estimate number is somewhere toward the middle of that range.
In summary, I find it a useful tool to get an estimated quick starting point, and better than other automated systems I have seen. Then one must apply things which only human intelligence and experience can supply.
njjack
Thank you All for the great comments,
we are looking to refinance and I needed an oppinion how accurate is zillow so i to know if we have a chance or not.
All of you make good points but would like to remind you of something you are missing .
The present situation is not a flat line with the home prices, I would more liken it to a desperate situation where desperate people are selling and scared people are buying.
A flat line would be the minimum wage, the people that can change it do not care and the people that need it changed are powerless, flat line are the Microsoft stocks but the house prices are not a flat line, there extraordinary conditions pulling the pricess in one direction and as soon as those conditions disappear the prices will go sharply in the oposite direction. that my 2 cents on the flat lines.
Donna
We bought a condo in San Jose, CA in 2007 for $675K. Zillow currently estimates my home’s value at $628K. This week my home was appraised at $475K. Considering I had been checking Zillow over the last few years to get an idea of my home’s value, this was a rude awakening!
booch221
Garbage in +
garbage out
=Zestimate.
I’ve seen properties gyrate $100K over the course of a year on Zillow–up–down and up again. How much faith can you place in something so erratic? You can’t apply an automated formula to property appraisal and expect anything but garbage.
Alex Roseland
I am a real estate investor and Zillow is a huge asset I use it all the time. You still definitely need to do some work on top of it though, Zillow doesnt know what kind of condition the interior of the home is in so sometimes you need to look at the home to determine this but if there are plenty of pictures online you can make a good comparison of the similar homes in the area that have recently sold and see their pictures then compare other information like the county tax assessment on the home and come to a pretty accurate market value estimate for a home with out ever seeing it in person..
How accurate are Zillow’s Zestimates? | Reno Real Estate Blog
[…] Related post: How accurate are Zillow’s Zestimates for our market? (March 3, 2012) […]
Jerome
BOMBARDED BY REALTORS SEEKING TO GET LISTING
I have had my property on Zillow for less then two weeks and I have received of 28 annoying calls from realtors pushing to get me to list the property with them. The reason I chose For Sale By Owner is because I do not see the point of paying 2-4% to a realtor who does noting but the three P’s. Picture in the MLS, Posts a sign on the property and Prays that some other realtor finds and brings a qualified buyer.
I clearly stated in the Zillow ad that I was not interested in a listing agent or any other service that a PPP realtor may have to offer. I now believe that Zillow broadcast to these predatory realtors who inundate the FSBO individual with pointless and harassing phone calls because one of the callers told me that she did not see the posting, because all she gets is a list of the FSBO phone numbers.
I have had one SIMI-Legitimate offer from a potential buyer for 80% of the asking price of the property. The potential buyer is actually from a predatory property flipping group.
The PROBLEM IS that the Zestimate is WRONG: I believe that the reason I have not gotten any real buyer offers is because the Zestimate is grossly incorrect. My three level town home has the third level completely finished, with a ¾ bath, a sauna and what can be a small kitchen area. The level can be used as a Family room or an apartment for someone older then a child.
A unit four door down, with the same floor plan BUT without the lower level finished sold LAST MONTH for $225,000.00. My unit, with the lower level finished, a newer furnace, newer double pane windows and updated lighting, is listed for $235,000.00. BUT the Zestimate provided by Zillow and NOT BY ME, shows the value of my townhouse at $197,000, I have a valid market analysis of my property that states the fair market values is $237,000. The Zestimate is $40,000.00 less then the market analysis. I noticed that the unit that sold for $225,000.00 is not considered in the Zillow DEVALUING process of my home.
Also the Zillow web site rates the elementary school in the area as sub-standard. I have never heard that statement made about any of the schools in the area. I have not been able to determine where Zillow got such incorrect information from.
If I were a buyer and I saw property advertised for $235,000.00 but the advertising service stating that the property is only worth $197,000.00, I would skip that listing and not bother to call the seller.
Zillow does not disclose the success rate that FSBO properties experience with their on-line ad service. Based on what I have experienced, I would ZESTIMATE that success rate to be very low.
I am pulling my listing off of Zillow this day because I believe that although they provide a good system to advertise your home, without your permission Zillow enter false or highly inaccurate information that may prevent you from selling your home.