Zillow Accuracy Discussion.

I hear questions from home owners and potential homebuyers about home values on zillow. “Why? Zillow is showing….? Are you serious?”  Well, I’m serious; and they are serious, too. They’ve put a lot of money in all those computers and software that analyze public data 24/7 and generate the value of your home! So do they claim that Zestimate (this is what Zillow officially calls the value you see on the screen) provides accurate home values?

A couple of weeks ago, at the Rain Camp conference in Bellingham, Spencer Rascoff from Zillow said, “That is why we don’t call it a “Zappraisal” but “Zestimate”. That’s what it is, an estimate!”

The question is, how accurate Zestimate is?

Well, it may sound funny but Zillow estimates their own accuracy, too! What they do, they compare the historic Zestimates with the actual transaction prices of homes that sold, and then create tables that show the accuracy. Where do you find it? On any Zillow page, scroll down to the very bottom and find the link:

After clicking on the link, you can further filter the results by state and county. Finally, you get to this table: (Actually, I cropped it a little)

If you look at, let’s say, Snohomish county data, you’ll see that 23% (about 1/4) of homes in Snohomish county were sold for the price that was within 5% of Zillow estimate. That is about $12,500 off on a $250,000 home.

You can check other columns as well (within 10%, 20%, median error etc). However, let me point out something that is not in the table. See, 72% of homes fall within 20% category. Let’s do some math. So it means that for 28% (100%-72%=28%) of homes in Snohomish county Zestimate is more than 20% off. That is about $50,000 off on a $250,000 home!

Let’s sum up what we found out about home values provided by Zillow so far:

• Roughly, for 1/4 of homes in Snohomish county zillow estimate is less than 5% off ($12,500 on a $250,000 home).
• For a little over 1/4 of homes (28% percent), Zestimate is more than 20 % off ($50,000 on a $250,000 home).
• For about half of all homes Zillow is off between 5-20 %.

What conclusion can be drawn from this? Computer models cannot replace hands-on research just yet. Zillow is a good place to start with but, if you need to find out the value of your home and want a better accuracy, you should either order an appraisal or contact your realtor for a comparative market analysis. (Shameless pitch -> I’d be happy to do one for you :) )

Latest Everett, WA Homes for Sale:

Showing properties 1 - 2 of 299. See more city of Everett real estate.
(all data current as of 5/20/2012)

1. $81,000 : 903 Center Rd, Everett
   
   3 beds, 1 full, 1 part baths

   Home size: 1,134 sq ft

   Lot size: 10,890 sqft

   Year built: 1968

   Days on market: 1
   
2. $164,500 : 1626 Wetmore Ave, Everett
   
   3 beds, 1 full, 1 part baths

   Home size: 1,400 sq ft

   Lot size: 6,098 sqft

   Year built: 1918

   Days on market: 1
   

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