A recent Wall Street Journal article  took a look at the accuracy of Zillow home real estate value estimates and they found that Zillow was either accurate to within 7.8% with reality. The WSJ took 1,000 recent sales and compared the sale price with Zillow’s estimate (which didn’t reflect the sale) and found that it was within 7.8% accurate, evenly split on the high and low side. However, the average doesn’t tell the full story, what’s the standard deviation? Well, on 110 of the 1000, it was off by more than 25% and of the 110, 23 were off by more than 50%. Zillow’s nice and, as I’ve mentioned in the past, it’s only as good as the information it has – often times it doesn’t have the full picture.
The example in the article was 7600 sq. ft. four bedroom home that Zillow estimated to be worth $661,756 but was recently sold for $2.7M. Why the huge disparity? It’s in an exclusive gated community, something Zillow wasn’t aware of.
So, what’s the verdict on Zillow? Still a fun little tool that really doesn’t bring much to the table. Can you use it to get an idea of the value of a home? Sure, but I wouldn’t bet any money on it.