Is the Zestimate for your home accurate?

 

 No. Here’s why:

 

The Zestimate is calculated with a proprietary formula based on public and user-submitted data: the number of beds/baths, lot size, home size, location, etc. Zillow does not go inside the home and look at the interior/condition. Like weather prediction, these estimates are forward-looking and will always be wrong to some degree.

 

How accurate? Nationwide at the time of writing, 82.2% of Zestimates are within 5% of the sales price. This might seem pretty good except for one detail: the Zestimate is updated immediately after the property is listed to a number much closer to the list price. This is for the 1.5 million on-market homes for which Zestimates have been calculated. For the 104 million off-market homes with Zestimates, only 39% of those that sell are within 5% of the sales price.

 

Zillow’s stock price has tanked since a year ago, from a peak of $198 per share on 2/12/2021 to $55 today. This is largely due to their attempt to buy, renovate, and sell in an automated fashion using their Zillow Offers program. While great in theory, in practice they relied too heavily on home value predictions and the homes purchased ended up depreciating in value by the time they were sold.

 

How can the Zestimate be useful? Looking at online estimates is useful as one tool in the collection of strategies to help strategically price a home and get the best price/terms for a seller. It can give perspective on where to price a property because many buyers will also be looking at these estimates. I look at the Zestimate, Realist AVM, RPR, and Remine values when conducting a market analysis.

 

In the end, the best way to know your home’s value is to talk with a professional. I provide free home estimates. Give me a call at 828-793-0464 and let’s get started. Hope to cross paths soon!





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