Many homeowners I know use Zillow.com to gauge the market value of their homes and homes of their friends. But just how accurate is Zillow? Zillow claims that their Zestimates are accurate within 5% of a homes selling price only 25% of the time. They are accurate within 20%, 72% of the time. What does this all mean? Means consumers cannot put too much stock in a homes Zillow estimate.
I took a quick look at the 10 most recent single family homes sold in Stamford and compared their final selling price to their current Zillow estimate. With the exception of one home, the final sales price did happen to fall within 20% of Zillow’s estimate. Overall, not bad results for a algorithm which has never set foot into one of these homes. Yet, clearly Zillow does not take the place of a professional appraisal (nor does Zillow claim to).
Additional information on what a “Zestimate” is:
Interesting! I’ve noticed wild swings up and down in our Zillow estimate – and no distinctions between like places with very different levels of home improvements.
Online home valuation sites can be misleading to sellers and borrowers looking to buy or refinance. They would be better served by a real estate agent, lender, or appraiser with access to a database of comparable home sales that can be used to determine a real value estimate.