Zillow Zestimates are still incorrect in Baltimore and beyond.
Recently, the founder of Zillow bought a home. He paid $1 Million ABOVE the Zestimate for the home he bought.
This was reported in a real estate industry newsletter called Inman, who got the information from an article on the Variety website. From the November 11, 2020 Variety article:
“Four years after settling into his $20 million Brentwood Park mansion, the tech guru has expanded his holdings, buying another house just one block away. Records reveal the 45-year-old Harvard alum wanted the second place quite badly — he paid $5.7 million, or over a million dollars more than the home’s current Zillow Zestimate.”
I have been sharing for years how Baltimore Zillow Zestimates are not accurate.
The “median error” percentage has improved over the years, but to understand, that means that half are below and half are above. Look at the chart from Zillow’s website (current as of November 17, 2020.)
The nationwide median error rate for the Zestimate for on-market homes is 1.9%, while the Zestimate for off-market homes has a median error rate of 7.5%. This means that the Zestimates for half of all on-market homes are within 2% of the selling price, and half are not. For most major markets, the Zestimate for on-market homes is within 10% of the final sale price more than 95% of the time.”
The median error percentage appears better than the details as you look further down the line.
A Zillow Zestimate in Baltimore is within 5% of the sales price 88.1% of the time. To break that down, at a sales price of $300,000, that means that the Zestimate is within $15,000 88.1% of the time. That means the Zestimate could be as low as $285,000 or as high as $315,000 88.1% of the time – but FURTHER from that 12.1% of the time.
Zestimates do come within 10% of a sales price 96.7% of the time – but on a $300,000 sales price, that means the Zestimate could be as low as $270,000 or as high as $330,000.
If you were a seller, would you be happy with $270,000 if your home’s market value were really $300,000? How about a buyer? Would you be comfortable paying $330,000 on a house where the value was truly $300,000?
Looking at the Zillow founder’s purchase, do you think the seller would have been OK with $1Million less than what he got for the house? What if the seller thought that was the correct value? The seller would have lost out on a million dollars!
Here are some other posts on Towson Zillow Zestimates:
A New Low for Incorrect Zillow Zestimates (This one is fun!)
When considering buying or selling a home, please contact and hire a local real estate professional to help guide you through the process.
When buying or selling a Timonium home or Towson or Greater Baltimore area home, contact me! I would be pleased to be of service!