Zillow Accurate Within 7.8%

A recent WSJ survey found that online property valuation site Zillow is accurate within 7.8% of the actual sales price.

The Journal looked at transaction prices recorded for 1,000 recent home sales in seven states, using data from First American Real Estate Solutions, a data provider in Santa Ana, Calif., and compared those prices with Zillow estimates, which didn’t yet reflect the sales. The median difference between the Zillow estimate and the actual price was 7.8%

However, when Zillow is off, it is damn off, by 25% on one in 10 homes, and in one instance, by $2 million.

For this reason, experts recommend using ZIllow as a starting point. Consider it among a suite of tools, like consulting local experts, checking out neighborhoods yourself, and asking around for sale prices. — BEN POPKEN

How Good Are Zillow’s Estimates? [WSJ via Blueprint For Financial Prosperity]

Comments

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  1. Seems to work better in larger markets, where there’s an entire metropolitan area providing trends.

    In our little micropolis, every time a house sells within a six block radius of mine, the “Zestimate” on our house either skyrockets or bombs out, depending on what the house sold for, and regardless of whether it’s half or twice the size of our house.

  2. phrygian says:

    Zillow tells me that my house has 4 bedrooms and 8 bathrooms. It’s only off by 1 bedroom and 6 bathrooms. I can see where the extra bedroom may have come from, but unless they’re counting closets as bathrooms (god, I hope not!) I have no idea where that number came from.

  3. Kornkob says:

    It’s also important to note that the sale price of a home has a great deal of complexity to it. 2 identical houses positione slightly differently on lots of differnt shapes can draw very different prices.

    Start throwing in factors like how well maintaiend it is and even the design choices you make and sell price can wildly fluxuate. (and that doesn’t even take into account deals that have an intangible built in– like when Dad sells his hosue to his kid for a ‘fair’ but way below market value price)

  4. Greeper says:

    My experience is that it works very well in suburbs and very poorly in cities. Particulalry Washington DC’s gentrifying neighborhoods. Way off.

  5. rbb says:

    Zillow’s way off for my Northern Virginia neighborhood. According to them, I have 400 less square feet and a tenth of an acre less of land that I thought I had. Also, their assessment is way off on the low side.

    As has already been mentioned, zillow is just a starting point…

  6. EnderVR46 says:

    It lists my house as missing 1 bed and 1.5 baths, yet claims it’s worth about $25k more than it is. Which is weird because every other house in the neighborhood seems pretty close to correct

  7. Dustbunny says:

    I live in a condo building and when I entered my address, Zillow gave me sale prices of all the single-family residences in the neighborhood, but not one sales price of any of the 88 units in my building. Feh. Does it not work for condos in general, or is it just my particular building?

  8. kimdog says:

    I use Zillow a lot in my work. Seconding that it works best in the suburbs. Not only does it have a hard time in the metro areas, it also performs poorly in rural areas (where there isn’t much to comapare, and houses may vary widely in the same areas). And as the article states, it also has hard time at the highest and lowest ends of the real estate market.

  9. gundark says:

    I got my real estate license in Colorado several years ago and these results made me think of something.
    1) 7.8 more then makes up for the differenc you would pay for a real estate agent to sell your house.
    2) Why not just call a Vetran Agent, have them come over, look at your house (count the correct # of rooms and bathrooms) and they can tell you what the fair market value is based on their experience and knowledge of the area?

    I say vetran agent because its a tough business to get started in, I was clueless for a long time.

  10. katana- says:

    At first, I thought that 7.8% was a lot to be off by (which it is when you’re talking in terms of hundreds of thousands of dollars). But thinking back to when I used it, and the way it seemed to work – it would be tough for it to be more accurate without getting a lot more data.

    Using it when getting started is a good recommendation. Its really nice for:
    -seeing property lines, like how big one yard is as compared to the neighbors
    -getting a feel for the range of the neighborhood, is this a $130,000 to $180,000 neighborhood or $150,000 to $210,000?
    -seeing who has a pool and who doesn’t, as if you don’t like to snoop
    -getting trends for the area in nice chart form to compare and contrast

    Its not a bad tool or concept, but I look forward to it improving and widening in scope in the future.

  11. Avacasso says:

    Seemed to work well on my condo

    the question is…do I sell now?

    consumerist, please provide an in-depth analysis of the real estate market by 3pm.

    thanks!

  12. Negative says:

    It seems to be off by about $30,000 for my house. It was off by 2 bedrooms and one bathroom. I signed up on the site and corrected their mistakes. After doing that the site said that my changes would not go into effect immediately but I would see a gradual change over time (Whatever that means). It still lists my house 2 bedrooms and 1 bathroom short.

  13. jconli1 says:

    Folks, you can update your home’s information on Zillow to correct its errors, as well as get a more accurate estimation. You can even post your own private “asking price” if you think it might be time. Spend some time with it and its a very useful tool.

  14. eeebee says:

    I’m having a hard time trusting Zillow because when I put in my address, it places my house a block south of where I actually live. When I put in my neighbor’s address, it places it on the right block. What’s with that?

  15. Hi, it’s David G from Zillow,

    phyrgian – That data typically comes from your county’s tax records. I’ve never seen them overstate bathrooms by that much. If you e-mail me your address, I’ll look into it [davidg at zillow dot com]

    rbb – It sounds like your county records could be incorrect. If you claim your house, you can update those facts on Zillow and calculate a new estimate.

    EnderVR46 – It’s likely that your house’s county records are incorrect also. Try calculating your own estimate on Zillow using the accurate home facts.

    Dustbunny – we do calculate Zestimates for condo’s but it sounds like we haven’t received information about any recent sales in your building.

    gundark – Zillow is not intended to replace the local expert’s advice that’s essential to most real estate transactions.

    katana – you’re right, more raw data is the answer. This is why we now allow owners and their agents to tell us more about their homes. And as time goes by, our data archive grows and Zestimates get more accurate.

    Avacasso – we don’t have a crystal ball but can tell you what trends we’ve see in many markets. Check out the Q4 house value reporting we released last week … http://www.zillow.com/quarterlies/QuarterlyReports.htm

    Negative – thanks for updating your house’s facts on Zillow. Anyone viewing your home will now recognize that the public records are incorrect. To calculate what your Zestimate would be using your updated data, click on “create an estimate” in the top right of your homes details page. You will be given the option to publish that estimate along side our Zestimate. FYI — we are also looking into the viability of using owners facts to calculate the Zestimate.

  16. katana- says:

    Thanks for the info, David. The site really does a pretty good job for as young as it is. Just wish it it were in my area. One day….

  17. cyclade says:

    Agree with Greeper that Zillow doesn’t seem to work well at all in cities, where square footage alone is hardly the driver of housing prices as much as location, access to public transport, and a having a deeded parking space.

    For example, I’ll offer my personal disappointment with Zillow’s “Zestimate” that I fear may directly harm my ability to obtain maximum value for my home when I sell (if people are doing research on Zillow).

    I own a 3rd floor condo in a 3-unit buidling in Cambridge, MA. (A classic 3-decker.) My unit is only about 60 sf. and a half bath smaller than my two downstairs neighbors’ places, but Zillow values my place at (depending on the day) 15-20% less than the other units. Real estate folks here will tell you – as they told me when I was a buyer, units on higher floors tend to increase in value by at least $15-20k per level in these buildings. More security, less neighbor noise – and in my case, higher ceilings. In addition, while similar looking buidlings on our street show similarly priced units – our building is the only one on the block that has a small parking area owned by the association where each unit has two deeded parking spaces — a substantial premium that our building offers that does not appear to be reflected in our Zestimates.

    Two other gripes: (1) None of the “comparable” units to mine suggested by the site are really comparable in any way other than raw square footage. Third-floor units are comparable to third floor units, not “garden-level” units. (2) Because I bought from a “motivated seller” at an obviously below-market price, I think my Zestimate is forever tainted and not accurately reflective of the “true” value.

  18. Sudonum says:

    As stated previously, these are all public records. Recorded at your local Clerks Office. I know in a lot of Florida Counties you can look up these records online for free. Google your county and look for a site for your Clerk. You can also check the tax rolls online for similar information. Sometimes its really enlightening what you can find out about the “legal” history of your property or others you might be interested in.

  19. eeebee: “I’m having a hard time trusting Zillow because when I put in my address, it places my house a block south of where I actually live.”

    It puts my house two houses south of where it is on the map. But google maps does that to me too. I dunno what the issue is.

    I just noticed that my $125k-ish house plunged $7,000 in its Zestimate overnight because someone three blocks over sold in bankruptcy. (Way under market, obviously.) That would SUCK if I was trying to sell now. Similarly, when my neighbors paid over-market for the house next door, my Zestimate suddenly claimed my house was worth $154,000. I worry a LOT that Zillow will end up screwing me when I try to sell my home.

    The other thing Zillow doesn’t take into account is neighborhoods. I live in a desireable neighborhood due to amenities within the neighborhood (abnormally large city lots b/c of utility layout, two elementary schools back to back, three churches, and a fire station, all within five minutes’ walk of my house) and due to a very stable neighborhood population with many families here for 50 years and children moving back to raise THEIR children in the same place. Two blocks south of my house is a main road that delineates the end of my neighborhood. South of this road home prices are DRASTICALLY lower — $60,000 for a house comparable in size to mine. Different school. Not walkable to anything here because of the road. In a different fire district, even. Less well-maintained. More mobile population.

    Zillow believes that all those houses south of the main road are comps to my house; apparently it just chooses comps within a particular radius with no relevance to neighborhoods or various political boundaries (school districts, townships, voting units, even cities).

    That said, oh gosh do I get a guilty pleasure from using Zillow to look up what people paid for their houses.

  20. katana says:

    Someone took my name! :(

    WHO DUNNNN’ IT?

    Signed,
    Katana
    (without a dash!)

  21. katana- says:

    cyclade-

    I feel your pain on the comps that Zillow pulls. I had forgotten about the comps. I’m not quite sure what their algorithm is for that, but my comps shared almost no qualities with my own home (other than 4 walls and a roof). Made no sense at all. Once again, its a young site, and doesn’t replace a Realtor.

    As for the ‘tainted’ value of your condo. Not to rain on your parade, but a condo (or house, or car, or computer, or jacket) is only worth what someone is willing to pay for it. All the assessments and appraisals don’t put cash in your hand. At the end of the day, its what they are willing to pay. Thats why houses selling low in a neighborhood will bring the other properties’ values down. Its part of the equation.

  22. matukonyc says:

    I use PropertyShark, which is much more accurate in a lot of respects than Zillow.

  23. katana- says:

    wtf?…