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Steve, Home Buyer in Bethesda, MD

How accurate is Zestimate?

Asked by Steve, Bethesda, MD Thu Feb 7, 2008

Zillow.com is a quite popular website. How accurate is "Zestimate" value of a property? My take is that it may not be very accurate for a particular house, but on average it gives an idea of values of properties in a community. Like to hear your thoughts and tips of getting information from other websites. Thanks!

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Answers

17
As a REALTOR and an economist I don't think it is that accurate Steve.
There are 4 methods to value a property in Real Estate. The 4th or Multiple Regression Analysis is probably most similar to what zestimate does. It essentially is a statistical method for spitting out a price based on several factors, once enough data points are obtained. But frankly what zestimate does is oversimplify this process and the more they do that, the less accurate it is.
When an appraiser uses this method (or an economist) there are literally over 100 inputs. Zestimate doesn't have anything close to this, they might have 2-3 dozen at best (based on a very thorough assessor's data) and this too is likely to be quite outdated. Think about how long it takes the assessor to figure out that you put new vinyl siding on your house, or added some skylights, etc.
The point is, that to do something like this is very complex and sure a computer program can (and is required) to do it. But this only really works if they have those 100+ data points. Everything from the type of moldings and floor coverings to a time dating variable (to account for inflation, appreciation, depreciation, etc. in a given market) are considered. How could zestimate possibly do this?? They cannot.
So ultimately what you have is a "zestimate", just that something close, maybe within 10% of the price. And frankly that's about as accurate as what your neighbor Bob, or your cousin Sherrie could tell you.
If you want a good value, call a couple REALTORS, they'll typically do a comparative market analysis for free and I think this is generally a better method, at least on residential real estate.

Brendan Murphy
Broker, CRS, GRI, ePro
Raving Real Estate
Laramie, Wyoming
4 votes Thank Flag Link Thu Feb 7, 2008
It is best to get your Realtor to do a comparable market analysis for you. In addition, I suggest that you take a look at area homes yourself. http://www.real-estate-search-and-sale.com
2 votes Thank Flag Link Mon Feb 15, 2010
I would trust it for as far as you can throw you computer. I haven't found it to be very accurate.
Web Reference: http://getprequalified.com
2 votes Thank Flag Link Sat Feb 23, 2008
A buyer would never be foolish enough to decide how much to pay for a house with only the data that Zillow or any of those websites use.

Knowing the average prices in a neighborhood might be interesting for some reason but it never even gives a rough guide as to what a house is worth. You don't really buy a house based on the square footage...or maybe I shoudl say instead...it would be foolish to buy a house based on square footage.
2 votes Thank Flag Link Sat Feb 23, 2008
Zestimates are not at all accurate... they're not even a good starting point. The zestimate on my home is off by at least 20% (too high). And as you can imagine, Realtors are pretty good at keeping track in the market of what their own homes are worth.
2 votes Thank Flag Link Sat Feb 23, 2008
Alan May, Real Estate Pro in 60201
MVP'08
Contact
From what I have seen the Zestimates can be very incorrect. They tend to follow trends and over-react to any recent change on the market. Three years ago; it undervalued my own home by about 40%. Currently it over-values it by about 20%. I have seen the same examples on many other properties. For a REAL value; contact an Appraiser; which will charge you about $400 or many local Realtors, like myself; will be willing to help you for no initial charge.
2 votes Thank Flag Link Thu Feb 7, 2008
With the current scenario, I do not think anyone can appraise a property very accurate..And we all know how the property were appriased last few years..The prices of home now depends what other homes are listed/sold at the current time..and by the time anyone gets that info it is already two months and prices have come down by another 15K to 25K..thats what happening in southern california..So whether you get the appriased or you ask the real estate agent, I believe the best is to look at hat the bank owned homes are listed for.. they are mostly lited below the current market and that's what is getting sold these days..
1 vote Thank Flag Link Mon Apr 28, 2008
It really depends on why you are looking. I tell people it is like a dating site. Take everything with a grain of salt, but it can be useful! I heard in a recent technology class that they are making their updates more frequent now, which should decrease some of the price gaps they were experiencing.

If you are looking to buy or sell, you should be working with an experienced agent who can provide all that information to you, in the best format for you.
Web Reference: http://www.headforhome.net
1 vote Thank Flag Link Fri Feb 22, 2008
Be careful. It is my experience in our location that Zillow doesn't always make a destinction between "high rent districts " and other areas. Zillow is a great resource but it, like most other real estate tools, has its limitations and it's best to be cautious until we have identified them.

The "Eckler Team"
Century 21 Almar & Associates
Venice, Fl 34285
941-408-5363
1 vote Thank Flag Link Fri Feb 8, 2008
They have really confused some of my sellers with a price today ot 10-25% higher than real value, and later at 10-25% less than real value.
I good Realtor can give you a CMA (Competitive Market Analysis) or pay the price and have an appraiser do a complete work up on your home - a local Realtor that really knows whats happening in the area will always be more accurate than those web sites!

Bill Wootan - Team Leader
Team One @ Century21 H T Brown
Web Reference: http://www.SoMdTeamOne.com
1 vote Thank Flag Link Thu Feb 7, 2008
Please, please stop propagating the false notion that there is such a thing as the "true value" of a house. Any property is only worth the value for which two parties agree to exchange it. And any results gleaned from estimating tools (even the tools that appraisers use) are just what they're purported to be: "estimates". Zestimates *are* very useful for providing another data point in trying to determine the value for which a buyer is willing purchase a property.
Flag Thu Nov 8, 2012
The best value estimate is through a Comparative Market Analysis (CMA) compiled by a Realtor familiar with the local market.
0 votes Thank Flag Link Thu May 8, 2014
The best value estimate is through a Comparative Market Analysis (CMA) compiled by a Realtor familiar with the local market.
0 votes Thank Flag Link Thu May 8, 2014
Zestimate is a crock! For no reason whatsoever my home went down in value according to Zillow while a similar house on the opposite corner from mine went up. The demographics of the neighborhood have not changed and I keep my home well maintained. I would not trust zestimate's so called calculations at all.
0 votes Thank Flag Link Thu May 8, 2014
Example:

I just purchased a home 4 months ago for $210,000, which was also the appraised value. The home had a Zestimate of $189,000 prior to my purchase. The Zestimate on my home is now $226,000. It also stated that the homes would increase in value by 2.5% per year and still makes that statement. That would mean if Zestimate is even close to accurate, my home is increasing at a rate of 59% per year based on the old value and 23% per year based on the appraised value.

Not to be trusted at all.
0 votes Thank Flag Link Tue Nov 26, 2013
Since its first report, Zillow has reported a continual increase in value of my house.
The most recent two increases were 2.5% and 2.4%.

I live in a small county seat town in a predominantly rural area (county population 50,000, town population 5000) and property prices reflect the fact that it's more than a wide spot in the road - but only just.

Although I realize that at least one property in my neighborhood has been sold within the last month or two, property sales are generally at a stop. The property sold for over $20,000 less than the Zillow estimate for my house - which is right next door. The Zestimate for my house is almost twice what I paid for it - less than five years ago. Hmmmm. I don't think so.

So, although the naive ones among us might get some feelgood, Zestimates to me are synonymous with hokey bullcrap.
0 votes Thank Flag Link Mon Jun 7, 2010
Zillow does a good job for what it is. An estimate. It has some easy to read data on the neighborhood and the house. But if the house has not been updated by the owner or a realtor then the info is from the tax record and can be out of date or just plain inaccurate. As most of the answers have said, ask a realtor for a no obligation CMA competitive market analysis and they will be more able to take into account the trends of the neighborhood and the area market in general. There is no substitute other than paying an appraiser. Feel free to contact me Mac Mccord mac@macmccord.com
Web Reference: http://www.macmccord.com
0 votes Thank Flag Link Fri Feb 8, 2008
Hi Steve,
No one truly knows what a house for sell for in this real estate market. Realtors can give opinions, Zillow can give you an opinion, your neighbor can give their opinion. The comps from a few months ago are not even accurate. Sellers and buyers need to be very flexible right now. Buyers really decide the right price for a property. Everything else is an educated guess. A home seller or realtor can update a listing in Zillow to more accurately reflect their particular home. If the house has not been updated in Zillow it usually is not very accurate. Last week I updated my listing at 18909 Lark Song Terrace in Germantown. Zillow had it listed as a single family home, it is a townhome. That made all the data on that street innacurate. I would be happy to speak with you about Zillow or any other questions you might have. Please feel free to call (240-997-8654)or e-mail (annmarieclements@gmail.com) me with any other questions you might have. Have a wondful day!
Ann Marie
0 votes Thank Flag Link Thu Feb 7, 2008
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