Have you ever wondered about those “Zestimates” from Zillow.com ? How accurate are they really?
I pondered this recently, as a listing I have coming on the market in Hunt Valley has a Zestimate about $40,000 LESS than the value determined during my true, in-depth market analysis as a licensed Towson Real Estate Agent. (On the other hand, using their “My Estimator” tool brings the value up to over $110,000 HIGHER than its true value!)
With a closer review of the Zillow site, I was able to find some interesting accuracy statistics about the Towson Home Price Zestimate averages (per Zillow.com):
- Zestimates within 5% of actual sales price (actual home sales) : 30%
- Zestimates within 10% of actual sales price (actual home sales) : 50%
- Zestimates within 20% of actual sales price (actual home sales): 71%
- Median Error: 10%
Here is the actual verbiage from them, which helps me understand the inaccuracy:
Data Coverage and Zestimate® Accuracy
The home data we have compiled to generate a Zestimate home valuation varies by location. Some counties provide all the data we could hope for, but others are lacking such key things as the number of bedrooms and bathrooms, or, in some cases, the square footage of the home. The more data we have, the more accurate the Zestimate. And, we’ve made it easier for our users to help us improve accuracy by incorporating edited home facts into our Zestimate calculations. In some areas, we might not be able to produce a Zestimate at all, but we do have some basic information on the homes.
When I stopped to think about it, I realized that the site does not have correct information because Baltimore County has not provided it to the public about the square footage, number of baths, the fact that it has hardwood floors throughout, a finished basement, and other imperative details when determining a Hunt Valley House Value.
As an example, if there is a home in Towson with the correct value of $300,000, 71% of the time the Zestimate could price the home as low as $240,000. Can you imagine being a seller viewing that info? Or how about a buyer, if it were 20% ABOVE? Would you, as a buyer, be happy with paying $360,000 for this home?