Do you rely on Zillow Zestimate to determine the value of a property?
As of late 2010, Zillow is the the 2nd largest real estate website in the United States. There are 12 million unique visitors per month who use Zillow for their real estate needs. If you have been on Zillow, you know that Zillow utilizes Zestimate. A Zestimate is Zillow’s Estimate of the value of a particular property. Turns out, many people rely on this Zestimate to determine property value. Do you know how accurate the Zestimate is?
Let’s Take a Look!
Click on Zestimate Value and Accuracy at the very bottom of the page or click here. You will be directed to a page that breaks down how accurate the Zestimate is of a home’s value. The accuracy varies by city.
Let’s take a look at Houston. You can see that Houston has a two star (out of four) rating, meaning that Zillow is “fair” at determining the correct value of a home in Houston. Zillow is only correct 25% of the time when determining the value of home within 5% of sales price. This means if Zillow says a home is worth $200K, they have a 25% chance of being within 5% of sales price. There is only a 25% chance that the home is worth $190-$210K. Is this helpful? I don’t think so. There is a 45% chance that the Zestimate is within 10% of sales price, and a whopping 71% chance that the Zestimate is within 20% of sales price. Talk about confusing, and sorry Zillow, but meaningless.
As great of a site and resource Zillow can be, this “zestimate” doesn’t work too well for us here in Houston. Like Zillow says, the Zestimate is merely a starting point for determining value. Why not call upon a real estate professional that can give you a much better idea of what a home is worth because we know the market, and we are great at crunching numbers? Best of all, we are human. Feel free to contact me should you need assistance.
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