How Accurate is Zillow?

Zillow has become a popular site for seller and buyers to take a look at the value of a home. But how accurate is it?

A recent article in the Wall Street Journal had some interesting information regarding Zillow's accuracy:

The Wall Street Journal analysis of 1,000 homes on Zillow found that the "Zestimates" are often good, usually within a few percentage points to the actual price. But when Zillow is bad, it is really bad. Zestimates were off by 25% in 1 and 10 homes and in one case Zillow was off the mark by 2 million.

According to the Wall Street Journel, Zillow executives acknowledge that estimates can be way off in some cases. These estimates are a good "starting point" for people trying to figure out how much a home should cost. Amy Bohutinsky, a spokeswoman for the company states "We don't recommend it as the final word."

Zillow can be quite accurate in some markets but estimates are sometimes hit or miss. Zillow tends to work best for mid range homes in areas where there are a lot of comparable homes. It tends to be less accurate for low and high end homes were there is less data available from comparable sales.

Part of the problem with Zestimates is the data fed to Zillow does not take into account if the house has been remodeled, or if it is a foreclosure or a fixer. Reported prices sometimes are misleading as well because there are instances where family members who sell between themselves will often sell for a token price.

So if you are looking to buy or sell a home,Zillow can be a great place to begin the search to determine the ballpark range of homes in the area, but it is also a good idea to get more in depth data that takes into account variances that can affect the overall value of a home.

Any questions? Want a copy of the Wall Street Journal Article emailed to you? You can contact me at lcartolano@apr.com or at 510.213.1139