How accurate are Zestimates?

That’s a great question since home buyers and home sellers are arming themselves with this data to support their points of view on “market price”. But you know what?

…Market price is determined by a willing Buyer and Seller agreeing on what price the home is worth buying.

2-15-2016: Another article: Midland real estate agent questions Zillow’s ‘Zestimates;’ company calls them a ‘starting point’.

2-18-2015: Another article “Starting With Zillow’s Zestimate May Not Get You Very Far

Here’s a recent article about Zestimates suggesting they are provided or “entertainment” reasons, not factual data.

Now based on the 5 of 7 random sales in or around my subdivision, the actual market sales price of properties ranged from 10-25% above Zillow – another one 8% above and another was lower by 22%.

Even the National Association of Realtors (NAR) had some input from investigative reports back in 2009 stating that 55% of the Zestimates didn’t come within 10% of the actual market price.

So although I applaud Zillow’s effort to provide Zestimates that try to give buyers and Sellers a relative market price, I have fielded several buyers not willing to pay the “market price” for a home because Zillow said it wasn’t worth it only to see someone else buy it for more and take their favorite choices away. Even though agents can show Buyers a vast number of examples that most (not all) properties sell within 5% of asking prices, Buyers then become more confused and stop searching while digesting this information.

This confusion will continue until a “perceived” independent research company (like Consumer Reports) investigates and releases a report to disclose the relative accuracy of the Zestimate for each and every subdivision in America….until that happens, we’ll just need to keep on seeing ill informed, disappointed, and confused home buyers and home sellers.

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