How accurate are Zillow on house prices estimates?

[sabhen]

I keep an eye on Zillow house estimates more for curiosity than anything else.

When I had to do a house value estimate for a refi, Zillow was always on the lower side.

The last few months, Zillow has shown a steady increase and then a step change increase within a couple of days.

(In the past, it also showed step decrease within days).

Do you take Zillow (or similar online firms) estimate seriously?

[runner3081]

I take them as one data point. Our values are high, compared to reality.

Will depend on the neighborhood. One tell is to compare estimate with listing or recently sold price.

[sperry8]

I keep an eye on Zillow house estimates more for curiosity than anything else.

When I had to do a house value estimate for a refi, Zillow was always on the lower side.

The last few months, Zillow has shown a steady increase and then a step change increase within a couple of days.

(In the past, it also showed step decrease within days).

Do you take Zillow (or similar online firms) estimate seriously?

Ballpark area at best. My buddies house in SF was $1mm off.

[surfstar]

+/- 50%

[KyleAAA]

Zillow publishes their median error by metro https://www.zillow.com/zestimate/

In most cities, it looks like you can expect it to be within 5-10% of the actual sale price for on-market properties. Their claim significantly less accuracy for off-market properties. I tend to average the estimates of several sources together.

[snowman]

This topic comes up often here, hit the search button and you will find plenty of reading material.

In a nutshell, it depends. In my area, very accurate - plus minus 5%. Their range is right on target, all the homes selling this year are right in the middle of it. Realtor.com is also very accurate, just slightly off Zillow. Redfin used to be accurate, not any more, they are off by about 20%. Not sure what happened there.

[ARB57]

It depends. Depends on WHAT? I have no idea!

About a year ago, they valued my house at $285,000. One day, out of the blue, it dropped to about $150,000 and over the next few months fell further to just over $100,000. I asked them why...they said their algorithms had changed. Fast forward...I sold my house 5 months ago for $300,000. Their "zestimate" is now $306,000.

[rkhusky]

Zillow doesn’t know about the condition or quality of your house. But if your condition/quality is similar to other properties and there is a sufficient number of properties, it can be close.

[retire2022]

op

It depends on the neighborhood as another poster stated, I would go by the bank appraisal and comparable in your area. At the end of the day, it is ballpark, and it is the bank which makes the decision for refinance, not Zillow.

[LadyGeek]

This thread is now in the Personal Consumer Issues forum (house prices).

[adamthesmythe]

I don't remember ever looking at the zillow prices for any of the houses I have owned.

When I sold I used comparables provided by my agent to set the asking price.

I guess that is because I regard zillow as only useful for entertainment.

[quantAndHold]

For the 2 houses that I actually know the value of, Zillow has always been about 10% low on one, and on the other Zillow has always been about 10% too high. But the amount it it’s off has stayed pretty consistent over the years. The one Zillow underpriced is always underpriced by a fairly consistent amount. The one Zillow overprices is always over by a fairly consistent amount.

So there’s value in the data if you’re following it over time. But it is probably not an accurate valuation of the house.

[mw1739]

I was curious so I check it out. The Zillow estimate for my house is currently the absolute lowest price I would consider selling at. Realistically I think it’s worth 5-10 percent more.

[stoptothink]

It has been pretty much spot-on for my home for 5yrs. But considering I live in a townhome with ~40 comps in the same neighborhood, that's not saying all that much.

[Jags4186]

3 months ago I refinanced. Zillow said my house was worth $523,000. The appraisal came back at $480,000. That's within the 10% they claim most of the Zestimates are.

https://www.zillow.com/zestimate/

Definitions

MEDIAN ERROR:
The nationwide median error rate for the Zestimate for on-market homes is 1.9%, while the Zestimate for off-market homes has a median error rate of 7.5%. This means that the Zestimates for half of all on-market homes are within 2% of the selling price, and half are not. For most major markets, the Zestimate for on-market homes is within 10% of the final sale price more than 95% of the time.

Wish it were wrong the other way.

[Old Guy]

Terrible for our location. It’s off to low by at least $150,000 based an an actual evaluation when we refinanced.

[Trader Joe]

I keep an eye on Zillow house estimates more for curiosity than anything else.

When I had to do a house value estimate for a refi, Zillow was always on the lower side.

The last few months, Zillow has shown a steady increase and then a step change increase within a couple of days.

(In the past, it also showed step decrease within days).

Do you take Zillow (or similar online firms) estimate seriously?

Yes, I take Zillow very seriously. Zillow is very accurate in my area.

[JBTX]

Zillow had my house recently at $344k last I checked . I'm in the middle of a refi which required appraisal and the market value approach came up with $344k. I feel gratified that I had to spend $600 for somebody to tell me my house is worth exactly the zillow amount.

I suspect if you live in a suburban neighborhood with lots of comparable houses it is going to be close. If your house is unique or more isolated then maybe not as much.

[GT99]

The primary thing it depends on is the variance in homes in your neighborhood. My last home was in a neighborhood where houses ranged from $450k to $1.2M. Zillow's estimate bounced around a lot, but we had an appraisal when we sold due to a bridge loan, and Zillow was about 3% above that appraisal. But we ended up selling for about 8% below the appraised value.

Current neighborhood is much more consistent. Just had an appraisal with a refi, and Zillow was within 1% of the appraised value.

[Kiter]

My rental is $283k ,smaller lots and lesser homes are $625k some up to $650k .

[Bogle7]

Do you take Zillow (or similar online firms) estimate seriously?

No

[MarkerFM]

I agree with those who say the estimates are pretty accurate for areas where there is a lot of activity for similar places.

One of our places is in one such area and the estimate is pretty accurate, although it doesn't reflect our completely new kitchen, master bath and laundry room.

Our other place is in an area with low density and some of them have water views. Zillow tends to ignore features like that which can have a large impact on pricing.

You can also drill down and look at the comps they use for their estimate, and also see how they use tax assessment data. For our low density place, they are using at least two comparables purchased by friends of ours somewhat nearby, and both have water views while ours really doesn't. As a result, the estimate for our place is too high.

[Kagord]

As stated earlier, I believe Zillow to be very accurate if:

• You live in a neighborhood where the houses are somewhat similar in construction quality and upgrades (I.E. not some historic district)

• Not much differentiation (I.E. ocean/scenic views, on ocean/lake/golf course, backs to privacy, school district grade, lot aesthetics)

• There is reasonable sales traffic in your neighborhood

• Massive upturn/downturn happening

• Buyers look at house/lot size price per square foot comps as a data point

• Buyers look at Zillow as a data point

I'd say +-5% if you match the above.

[Jack FFR1846]

Wife's aunt was moved from 3 decker, lead paint, asbestos, knob and tube wiring house built in 1890 in horrible condition to assisted living. Zillow priced it at $295k. House sold for $135k. Accurate? I think they must price based on square feet times some number and they assume all houses are the same. Another house on the street with another elderly resident all alone in a 3 decker was very similar in the Zillow price and sale price.

If you don't actually sell your house, you don't know what it's worth.

[jfn111]

Wife's aunt was moved from 3 decker, lead paint, asbestos, knob and tube wiring house built in 1890 in horrible condition to assisted living. Zillow priced it at $295k. House sold for $135k. Accurate? I think they must price based on square feet times some number and they assume all houses are the same. Another house on the street with another elderly resident all alone in a 3 decker was very similar in the Zillow price and sale price.

If you don't actually sell your house, you don't know what it's worth.

That's exactly what we see in the metro area here. If you have a neighborhood of 1910 built houses and all the sales are of nicely maintained and updated houses, Zillow will assume your house is in the same condition. All Zillow can look at is square footage and the number of beds and baths. They have no idea of the condition of the house.

[lazydavid]

I don't really trust any of them, but in my area Zillow is worlds better than Redfin. I believe my house is worth somewhere around $440-450k. Zillow says $415k, Redfin says $536k.

[Nowizard]

A Realtor friend said they are more accurate in some places than others, and that the differences depended on the geographical areas included in the estimates. Areas are very broad in more rural areas, for example, in even one or two zip codes for others, apparently. We have noted the markedly increased estimates for out house, as well. Redfin is lower than Zillow, but substantially increased over the past year.

Tim

[mkc]

In our area, Zillow doesn't even have the properties (nor their sales histories) identified correctly. "Zestimates" are completely out of whack as well.

[markelp]

Any item is only 'worth' what someone is willing to pay for it.

We just sold our house and I kept track of the Zestimate. It was $362K they day before we listed. Then it immediately dropped to the listing price when we put it up for sale ($345K). Then it dropped again to exactly the sale price ($325K) once the house closed. All within the space of about 60 days. I doubt we could find a buyer for our house at the initial $362K Zestimate. But I *know* it was worth the $325K on the day we sold, because that was the highest a buyer was willing and able to pay.

[JackoC]

Common thread, with as usual some posts IMO exaggerating how inaccurate Zillow typically is. I think the basic answer is that if you're seriously considering selling your house you can't plan your offer price based on Zillow alone. Even in areas where the number turns out to be accurate enough for that purpose, you'd have to research other sources to know that. But, if you are simply evaluating how much financial risk you have in your real estate v say stock holdings it's usually accurate enough I think. Although you can also just average the outputs of Zillow, Redfin, or other without spending much more time.

Last time I carefully studied comparable sales our house's value seemed approximately in the middle of Zillow and Redfin estimates, Zillow was ~5% higher, Redfin ~5% lower (I understand in some areas it's Redfin that tends to be higher). For a cheaper rental property in same city we just put on the market Zillow seemed more in error. The starting offer we came up with, in consultation with a reliable realtor we've used before, was close to Redfin's, Zillow's was ~13% higher, and the offer isn't too low because people haven't jumped all over it. But I would say the second property is harder to value, less uniformity of comparables in its neighborhood in terms of age (100 yr+ plus to new) and condition. The comparable single families to our house are a pretty large number in a small area almost all of generally similar type and age (mainly 1880's-1901) and most configured/reconfigured to single family are in good shape though some more extensively modernized (which tends to show up in property tax reassessments, for an algorithm searching public records) others retain more original features (less accurately reflected in assessment or other public info) etc. Point is, you can sometimes see why these automated valuation methods might be more or less accurate in particular cases. And some is common sense: if your place is in obviously worse shape than neighborhood standard, and the other places aren't in better condition because of major renovations that an automated system might detect from public records, then obviously you're not going to get as much as the standard condition places.

[rich126]

I've found them pretty close, within 5% in most cases. I've recently (last 24 months) sold two homes and they were very good. The two homes were in very different locations (2,000 miles apart). Like much of real estate, I think it is very location dependent. Not something I would obsess about.

[MikeZ]

So I had my home apprised twice and both times they were within less than 1% of the Zillow estimate.

I think the key is thinking about how Zillow thinks about things: It's looking for comps in the area and using that as the basis adjusting to attributes it knows. If the comps are easy from a track home development the estimate INHO is as good as a real appraisal. The more bespoke home or lot features makes the estimate almost worthless. If you are an average joe living in a little box filled with ticky tacky, I would take a Zestimate to the bank.

[regularguy455]

I take an ensemble approach. Find all the websites and average them together. That is the best estimate you will find. I have found appraisers are wildly inaccurate and I don’t trust their numbers any further than I can throw them.

[MathWizard]

I have looked at Zillow, but generally use the County Assessor's estimate as a better estimate.
Zillow seems to be within 10% of that.

What I could sell the house for, and in particular how fast it would move, is highly dependent on
whether it is a buyer's market or seller's market.

The Zillow estimate today is 7% higher than my last assessment. More important, my house is estimated at
12% lower than the median used house price, and in a good location, next to an elementary school, so at least
unless there is a terrible glut, or we are in another Great Recession, it should sell reasonably fast.

[drk]

I have looked at Zillow, but generally use the County Assessor's estimate as a better estimate.
Zillow seems to be within 10% of that.

At least in my area, one of Zillow's models is based off of the tax assessment, using nearby comparable houses to estimate how to adjust the assessed value.

[iamlucky13]

Zillow overstates mine by a little shy of 20% compared to the tax-assessed value (using the Zillow estimate history to check the approximate time when our annual mass appraisal happens).

I think the tax-assessed value is itself too high.

I appealed it 3 years ago, and checked the comparables myself. For reasons the county declined to tell me, even though they did not challenge the comparables I submitted or any other part of my analysis (eg - age and square footage adjustments), they still settled on a value around $30,000 higher than what the comparables indicated. Furthermore, the next year they raised my assessed value by more than the mass-appraisal adjustment, again without providing any information. I have not submitted a further appeal because life has been really busy and the experience makes me wonder if it is futile, but I think the county has me about 10% high.

So overall, I think Zillow over-estimates my home's value by about 30%.

Part of the problem is I'm in a weird semi-rural area that a lot of rich people are moving into and affecting the values disproportionately. For example, the 4 closest neighbors are (1) tiny, 100 year old farmhouse (2) old manufacturered home, torn down after the last tax assessment, in the process of being replaced with a $1 million home (3) brand new $1.2 million home (4) brand new $1.5 million home.

The assessment models can adjust for lot size and square footage without too much trouble, but not for upscale amenities and quality. Every time a home similar to mine gets torn down and replaced with a mansion, the waves in the comparables pool get bigger.

[drr1099]

i can give you two data points from an upscale Philadelphia suburb. My old townhouse that I currently rent out seems very accurate (slowly fluctuates between 355 and 363). I am guessing it's because it is a development full of virtually identical properties so it has plenty of data to make a good estimate. My primary residence also appears to be accurate. My home was purchased for 603, and for years, Zillow estimated that it was worth about 625. Recently, I added a deck that cost about 30 grand and the value jumped to 675 which may be a combination of increasing prices and them detecting a change in assessed value. Most of the properties in the development go for 650-700

[Wricha]

Recently, past month I sold my house. I put it up for sale at 2 times the Zillow estimate, sold it for more than the ask in one day. Interesting when I listed it, zlllow’s estimate jump to with in $10k of my ask.

[beernutz]

IMO some buyers do take it seriously but I don't because based on watching the value of my second home I would go crazy

A few years ago we bought a small second home, mostly for the land value as it was on a river, and the z-estimate was $150k. You couldn't buy an empty lot for that anywhere on this river much less one with improvements so the value was completely unrealistic. The seller would have laughed in my face if I'd offered that as he'd paid almost twice that much years earlier.

Right after we closed the z-estimate disappeared with just a - in its place. Then almost a year later the z-estimate returned as a number pretty close to what we paid so I assumed zillow finally registered our purchase.

Slowly over the next several months the z-estimate increased by about 40%, which was over a $100k increase, until it peaked and suddenly dropped back over a couple weeks to around what we paid. After that it again slowly went back up about 20% over our purchase price until finally it disappeared again altogether earlier this year.