Are Zillows Home Value Estimates Accurate

Are Zillow Home Value Estimates AccurateOne of the questions that real estate agents often get from consumers is “how accurate are the Zillow home value estimates”. There are more tools available than ever for the average person interested in buying or selling a home. The internet provides numerous resources for everything related to real estate – locating properties, viewing, listing, advice on buying and selling and even pricing calculators. Zillow is one of the more popular real estate websites that offer many of these tools. Unfortunately, while these tools can certainly prove handy, there are times when using them can give you unreliable information.

The Problem With Zillow Home Value Estimates

Sites like Zillow have great potential to empower buyers and sellers. Where once the world of comparable sales and real estate values was understood only by real estate agents, now everyday buyers and sellers have the ability to learn tons of useful information about area properties including their own.

They no longer have to go to a real estate agent for every little bit of knowledge. The problem is, the estimates – or “Zestimates” as Zillow calls them – are not always accurate. In fact, they can be wildly off, leaving the buyer or seller worse off than before they looked at them.

Zillow may do its best to give you an accurate price of what a home is worth. In the end though, it is only an automated system that cannot think for itself. It cannot account for variations in any number of things – variations that substantially alter the price from any sort of “average”.

Could the estimations be better programmed to account for these things? Definitely. But we are not dealing with the ideal Zillow, we are dealing with it as it is now. When you are trying to buy or sell, you cannot afford to be off by tens of thousands of dollars in your pricing or your bidding.

So when someone asks a Realtor “are Zillows home value estimates accurate” you will probably see a look like the one in the picture above.

In my personal experience looking at Zillow home values in the area of Massachusetts where I am located they are typically off anywhere from $20,000 to $50,000 of the actual market value. Probably better than some markets but worse than others.

How Zillow Estimates Value

Zillow uses a proprietary formula to determine the value of a home based off of information the website has obtained from public records and information entered by users. The site knows what the home sold for the last time it was purchased and it knows this same information for other homes in the surrounding area. Using this and data entered in by homeowners – things like features of their particular home – Zillow comes up with a price that a home is worth.

From what many have gathered, one of the value factors that is at the top of Zillows formula is using a properties assessed value. Unfortunately rarely does assessed home value have a correlation to market value. They are two completely different things. Assessed values are used by towns to collect taxes and in many cases trail the actual market value of a home.

In my experience I have seen homes sell for over $100,000 more than the assessed value. I have also seen them sell for that much under the value. Intelligent real estate agents never look at assessed value when trying to determine market value. If only life were that easy. It would make our jobs as agents so much easier.

Why Zillow Estimates Fail So Often

Why Zillows Values Are WrongOn the surface, the method used by Zillow seems like it would give a pretty decent ballpark figure for the value of a home. And sometimes, it succeeds. More often though, Zillow estimates are off significantly – sometimes by 40% or more.

The most recent selling price of a property is certainly useful information to have and is likely the easiest concrete data that Zillow can obtain. This is information that buyers and sellers should know about properties. However, it does not indicate what a home is worth now. The market is changing minute to minute and a sale price that is years if not decades old is no way to estimate the current value of a home.

The recent sale prices of nearby homes are also useful when you are buying or selling. Known as comparable sales, they make up a major factor in how a real estate agent will price a home. The problem is, these comparable sales need to be considered for what they actually are – not as indisputable numbers. Comparable sales can only be viewed as an apples to apples scenario in very specific situations.

If your home is very similar to all the other homes in the neighborhood – such as in a newer housing development of moderately priced homes – and no one has had time to renovate the properties, comparable sales may be viewed as apples to apples. But if you are in an area where the age, size or features are varied, then it quickly becomes an apples to oranges situation. Both fruit, but very different kinds of fruit.

The way a Realtor determines real estate market value is off the charts different than how Zillow does it. Local real estate agents or even an appraiser understand how one comparable sale relates to the next.

A good Realtor is seasoned in comparing drastically different homes in a single neighborhood to get an accurate price on a property. Zillow does not have this kind of ability. This is why it can be off so significantly at times. Comparable sales are only one tool in measuring the value of a home and Zillow is not so great at using this information as it should be used.

Zillow in fact does a good job informing consumers that Zestimates may not be accurate in this web page. The problem however, is that most people never see it. Maybe it would be a good idea for Realtors to share this webpage more?

Another reason the estimates are so off according to Zillow is their evaluation method differs from that of a comparative market analysis (CMA) completed by a real estate agent. Geographically, the data Zillow uses is much broader than just your neighborhood or town. Zillow states that often times, they use all the data in a county to calculate.

So though there may be no recent sales in the “neighborhood”, even a few sales in the area allow them to extrapolate changes in the local housing market. However, the data they gather does allow the models to incorporate the  neighborhood patterns of recent sales.

Is there any wonder why Zillow home value estimates are so inaccurate? All that keeps coming to mind when thinking about using “county data” is you have got to be kidding me. The values from one county to the next in my area varies tremendously! Lets just throw all the data into one big barrel and call it Zillow value soup.

Why So Many Real Estate Agents Hate Zillow

Why Real Estate Agents Hate ZillowWhile hate is a strong word this is how many real estate agents feel about Zillow. Why is this the case? It is all about one word – credibility. Real Estate agents as a whole have a difficult time as it is being trusted by some people. In some circles we are only regarded just above a car salesmen. When a home seller sits down to interview an agent on many occasions a homeowner will already have visited Zillow and taken a look at their “Zestimate of value” for their home.

Along comes a Realtor who presents their comparative market analysis of all the homes in the area that have recently sold, gone under contract and are currently for sale. The Realtor carefully takes the homeowner through all the data until they finally arrive at the suggested list price and probable sale price. The sellers jaw hits the floor. The local real estate expert has just come to the table with a value that is $50,000 less than what Zillow says the home is worth.

This is where the real estate agent has to go on the defensive because “Mr. & Mrs I don’t trust Realtors” is now looking at you like have three heads. How could Zillow be wrong after all they are a really well run organization and we see them advertising on television?

What most sellers don’t understand is that Zillow estimates values of over 100 million homes across the country. It would be impossible for them to accurately predict the value of every home in America.

They don’t know what if anything we do to our homes. You could drop $75,000 renovating your kitchen and baths tomorrow and Zillow won’t know that. The last time I checked there wasn’t a Zillow peeping tom that looked in everybody’s windows. I think everyone can agree though that dropping that much money into kitchen and bath improvements is going to have a substantial impact on market value.

Here are more things to ponder:

  • Zillow doesn’t know that the town data card is wrong and you really only have 3 bedrooms not 4.
  • Zillow doesn’t know you have a $20,000 structural crack in your foundation that needs repair.
  • Zillow doesn’t know that your roof is on it’s last leg and needs replacement.
  • Zillow doesn’t know you have a major easement running through your backyard that limits its use.
  • Zillow doesn’t know you just added central air conditioning, a sprinkler system, a security system and $10,000 worth of landscaping.

Is the picture starting to become more clear about the accuracy of Zillow estimates?

How Zillow is Useful

Zillow Has Great InformationYou may be thinking after ready the above information that I am not a fan of Zillow. Actually that is really far from the truth. I love everything about Zillow except for their Zestimates of value. The other information that Zillow gathers can be really useful when you are buying or selling a home.

When you are ready to buy a home they have an excellent platform for looking at properties. The information provided is second to none in my opinion. There is no doubt that tons of folks love their integrated Bing maps that come with every listing. These are super handy when trying to decipher what is around a particular property.

They have all the information you would expect when buying a home like the square footage, bedroom and bath count, age, lot size, taxes, etc. Where they really excel however is their data of the past ownership of the home and what the owner paid. This is information that is hard to find elsewhere and Zillow does a marvelous of putting it at a buyer’s finger tips.

From a sellers perspective the site is excellent because the better a property looks online the greater chance a buyer will be picking up the phone to schedule an appointment with their real estate agent.

Zillow also has an awesome app for those that have a smart phone. While you are out house hunting you can quickly and easily pull up information while in front of a home! This of course really comes in handy when you are out by yourself and don’t have a real estate agent handy to ask question you might not otherwise get the answers to right away.

Folks there is a reason why Zillow is the #1 most visited real estate website on the internet. Despite that fact that many Realtors hate them because of their crude estimating model, they do provide excellent data that is helpful to both buyers and sellers.

Final Thoughts on Zillow

There have been several studies done that demonstrate that it’s possible Zillow can be accurate within 80-90% on the value of a home. This means that its estimates can be a good starting point. However, when you are want to price a home to sell or you want to know what a home is really worth so you can buy now, its numbers are not accurate enough. For on-point accuracy, you need a savvy real estate agent than knows the area and is successfully working it right now.

Zillow also shows you the way prices are trending, either up or down, in a particular area. This is certainly useful information that can help you decide where you really want to buy and when. It is always good to know where prices appear to be going when you are making such a large transaction.

Zillow is a useful too, but it does not provide enough accuracy on home prices to be used exclusively. The site states that its estimates are only a starting point. Keep this in mind when you are getting your own Zestimates. If you are selling a home for sale by owner and were not planning on meeting with an appraiser or real estate agent to help you determine the accurate market value because you thought the Zillow estimate was good enough, hopefully this has been an eye opener. Keep in mind that the number one reason why homes do not sell is because of an unrealistic asking price. If you price your home incorrectly out of the gate more than likely you will end up selling it for less than you would have if priced correctly.

Additional Helpful Zillow Resources

Pricing a home properly is an art and science all rolled into one. It is not accomplished very well by trusting a computer generated value whether it is Zillow or some other online valuation tool. If you want an accurate value of your home always consult with a local real estate professional or competent appraiser.

Video: Explanation of Zillow Value Estimates

The video does a nice job examining Zillow pricing and the accuracy of their Zestimate feature.

The above Real Estate information on are Zillows home value estimates accurate was provided by Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at [email protected] or by phone at 508-625-0191. Bill has helped people move in and out of many Metrowest towns for the last 27+ Years.

Thinking of selling your home? I have a passion for Real Estate and love to share my marketing expertise!

I service Real Estate sales in the following Metrowest MA towns: Ashland, Bellingham, Douglas, Framingham, Franklin, Grafton, Holliston, Hopkinton, Hopedale, Medway, Mendon, Milford, Millbury, Millville, Northborough, Northbridge, Shrewsbury, Southborough, Sutton, Wayland, Westborough, Whitinsville, Worcester, Upton and Uxbridge MA.

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  1. says


    Great article on Zillow! Zestimates are definitely a problem and we find that most buyers see that homes are already sold when searching. We created our own website so we can remind our buyers that good data is available as we remove the sold properties each day.

    When thinking about Atlanta, think of us. We would love to refer business to you as well. We have been with RE/MAX 28 years and consistently in the top producer list in Georgia.

    Thanks again,

    Tony Williams
    REMAX Unlimited

    • says

      Thanks for the compliments Tony. I think Zillow has a great site with the exception of the valuation feature. It causes so much doubt with people. Zillow should stick with the rest of what the do well and get rid of this feature.

  2. says

    What a good article for homebuyers and homesellers! You are right in that Zillow uses a mathematical formula, but that it’s just that — a formula and not a person who can look at all the details and information about a property and give a knowledgeable and insightful value for the home. It also doesn’t take into consideration that some things are more valuable in different parts of the country — pools are a great addition (and up the price!) to Phoenix houses; whereas here where I live and work in Newport Beach, CA, they aren’t quite as hot of a commodity because of the proximity to the ocean and the overall weather.
    Zillow doesn’t provide the whole story/reason for a home’s price; only people can look at all the ins and outs!

  3. Steve Holzwarth says

    Zillow and the “Others” are only in the game for the “marketing numbers-hits so they can sell advertising on their websites. along with leads they generate and sell to Realtors…who are crazy enough to pay for them. Zillow and the others could care less if you buy a house because of their website value estimates or other information.

    Your seasoned professional Realtor with local market experience can assist a seller with evaluating the most accurate local market value of a property. Even the MLS runs behind today’s market value due to reporting numbers being closed dates (30+ days old). Not considering the contract price was agreed upon 30+ days earlier. Values can change in 30-45 days based on supply and demand. Sellers should be careful and not leave money on the table due to their lack of TODAY’S local market property values. Happy home buying/selling!

    • says

      Steve I agree with you. Zillow is in this to make money however they can. There is no question if you are buying or selling a home you should always consult with a local real estate professional and not a Zillow computer generated value.

  4. says

    Bill~ I am so disappointed with Zillow. Believe it or not “we” have control to make Zillow go away because Zillow depends on us. Unfortunately “we” haven’t band together, but “if” we ever do, “we” could shut Zillow down in a few months. Zillow depends on REALTORS paying them, all we have to do is STOP feeding the chicken, and hopefully one day “we” do!

    I can’t stand how Zillow profits off of selling zip codes they don’t own to us. I despise how they use our listings as the bait. Even more concerning is Zillow does business as an entertainment company and that’s how they get away with publishing inaccurate Real estate information.

  5. says

    Excellent article that really gets to the core of what is good and bad with the Zestimate and Zillow in general. The bashing just isn’t going anywhere (one reason I stopped) and the Zestimate will never go away. Hopefully they’ll continue to improve it so the debate is lessened.
    One brilliant point you made that is often unspoken is that agents have insight into factors Zillow will never have (foundation, improvements, etc). In many markets those things have significant impact on value, thereby making the agent the best option for an accurate value.
    I’m glad this article is getting a good response. Hopefully consumers are reading it as well.

  6. says

    I like your comments about Zillow. Zillow just trashed one of my listing as a pre-forclosure and valuing it as below Zestimate at $175,000 less than the asking price. Why does MLSPIN allow agents to link with such an inaccurate website. The few thousand agents have checked off linking this site should un-check giving them free access. We should make Zillo pay for our information. Those running MLS Pin are not looking at our best interests as Brokers.

    • says

      Jim this is the feeling among many real estate agents. The National Association of Realtors got it all wrong by letting these outside portals control our data and then sell the leads they receive back to us. It’s insane! I think Zillow loves the fact we talk about the inaccuracy of their estimates. It keeps their name in the spotlight.

  7. The Masked Marvel says

    The home we just sold had FOUR Zillow listings, each with a different status and “Zestimate.” Most of the data went back to the owner before the owner before us. The HIGH “Zestimate” was 3/4 of the sale price of the property; which actually went for more than our list price. It’s an arbitrary, idiotic number that uninformed people still use as a metric.

    And I can say as a seller we had to consider it, too, for that reason.

    It would be nice if realtors would find a way to keep track of who doesn’t consider houses or pays less at least in part because of the “Zestimate” and then we all class-action sue the bejeezus out of Zillow.

  8. Clara Laub says

    We bought our house 1 year ago and six months later Zillow said their Zestimate was $10,000 less than what we paid for it. Their info indicated our purchase was via a Foreclosure Auction. It wasn’t, it was a conventional sale; we tried to correct the error twice but they did not change it. Since our purchase we have added almost $15,000 in improvements, including Energy Star heating and air conditioning units, fencing, extensive landscaping, leaded glass entry doors, etc, and now Zillow has dropped the value another $5,000. It is absolutely sickening that they get away with hurting property values with harmful and wrong information. It should be illegal to do so.

    • says

      Clara it really is amazing that Zillow who otherwise provides great information wants to keep this inaccurate tool on their site when so many people complain about it. The only theory is Zillow loves being mention whether negative or not.

  9. says

    This is such a great article. I can’t tell you how many times I’ve had to defend a home value against a Zestimate. My first question to my sellers at that point is, “when was the last time that Zillow was in your house”? It is incredible the way that people cling to and trust a Zestimate because they are a giant. Coming from a software background, I try to explain to people that there is a computer somewhere churning data to spit out a value on your home and how do we know there isn’t an error in their algorithm. So, so frustrating.

    • says

      Thanks Geva. That is exactly why I created the article. As a real estate agent you get tired of seeing what amounts to blatant misinformation presented by Zillow. This article should set the record straight and help anyone reading understand the facts about a zestimate.

  10. says

    I remembered this post and just yesterday, a friend of mine was crowing about the “Zestimate” on his home. I am glad I fould this again I am sending him the link to your article. People forget, this is just computed generated and often outdated information.

  11. Shelley says


    Great article.

    I don’t know how Zillow get’s away with publishing home values in the first place. I’ve found in reviewing my own property value on Zillow’s web site over the past few years it just depends what month it is as to what Zillow value on my home is. I find that a $150,000 difference higher and or lower is quite alarming on a 30 day revalue estimate.

    A true home value can’t be accurate until such time as the home is visually inspected both inside and out by a qualified appraiser/realtor.

  12. Scott says

    I find all the Zillow/zestimate bashing quite suspicious given the source. Absolutely, only commission seeking real estate agents should be the source of all knowledge when it comes to real estate valuation!

    Sure there are things Zillow can’t know in creating specific zestimates, but their numbers are generally pretty useful as a guide, and they have their track record of accuracy right there on the website for all to see. Lord knows how many real estate agents I have talked with about real estate values who’s numbers were far less accurate than Zillow–but real estate agents get to toss around numbers and never provide any information on their accuracy track record.

    Like all formulas, Zillow’s zestimate numbers have improved, and will continue to improve as more information becomes available online and they further refine their algorithms. And here is a not well-kept secret–many real estate agents use formulas like price per square foot in coming up with their value estimates–and they should!

    • says

      Scott if I didn’t know better I would be suspicious of whether you work for Zillow or not. Clearly you are not well informed on the topic as almost every major news source in the country has done a story on the inaccuracy of Zillow Estimates. Their estimates are not useful as a guide in the least. I don’t know a single person who is interested in finding out the value of their home that would accept being off by ten percent or more. Sorry but that is ridiculous.

      The only thing I do agree with you is that there are plenty of real estate agents who don’t know how to properly value a home. This is evidenced everyday by the myriad of price reductions on homes that were not priced properly.

      By the way price per square foot is one of the worst ways to value a home! There are four classifications of housing including economy, standard, custom and luxury. A 2500 square foot home could be built in any of these forms. The difference between economy and luxury can be astronomical.

  13. says

    Hi Bill,

    Zillow could very possibly be the evil empire. They are really just a marketing machine looking to sell leads to Realtors. I know they don’t really care about the accuracy of the Zestimate. All they truly care about is selling overpriced leads. For homeowners that want a ball park figure on what their home may be worth the Zestimate may have a place. To get a true picture of a list price for a home an informed homeowner should use a Realtor. There are too many factors that are not public record about a home and homes that have sold that the Zestimate does not have access to.

    Thanks again for writing great articles!


  14. Jim Zeschke says

    Excellent article. Finally, someone explains why my home and property keeps going down. This article totally makes sense and even gave me a positive spin on my opinion of Zillow. Your explanation of why Zillow home values are not accurate makes so much sense. I hated them before this article. Thank you for this and for being so thorough.

    • says

      Thanks for the compliments Jim. Zillow home values can be so misleading to someone who does not sell homes everyday. The general public often times relies on information they find on the internet. This is a bad move when it comes to valuing real estate. It is impossible for Zillow or anyone other online tool to accurately value a home with all of it’s many variables.

  15. Alan says

    There seems to be a bias against Zillow by the agents in this thread. I have recent experience having sold a house in September 2015. I looked at the Zillow estimate which was $284,000. I had two agents give me their estimates. One local another from a major national agency. The national agent came in at $245,000 the local agent at $279,000. We priced at $285,000 and sold a week later at $293,000.

    I look at the Zillow value of my current home. We are in a private community with 2 miles of private beach, two 18 hole golf courses, an Inn and restaurant on the beach, a pool on the beach with a bar. The home next to us sold for 1.1 million and the one across the street for 2.1. Ours is much smaller a cape and is valued on Zillow for $567,000. I believe this is fairly accurate. Zillow seems to value by the entire town not our private community.

    So Zillow requires some interpretation but I don’t think it is inaccurate as this article suggests

    • says

      Alan do you even hear what your are saying? You sold your home for $293,000 but Zillow valued it at $567,000? I will repeat – Zillow home values are completely inaccurate and should never be used for the basis of making any kind of real estate decisions!

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