Zillow Inaccuracy - Part 1

I want to start off by saying that this is not another "Let's Bash Zillow" blog post. As a Realtor, you have to be impressed by what Zillow has accomplished. They have changed the real estate industry forever and no real estate professional can deny that. In my opinion, some changes are good and some changes are bad. I am writing this mostly as a resource for my agents to use with our buyers and sellers as well as our readers who rely on 3rd party real estate website's data (Zillow, Movoto, Realtor, Trulia etc.)

"But Zillow says the home is only worth this much!"

There is nothing wrong with a home buyer using Zillow or other 3rd party real estate site as a resource or guide but they need to be careful in letting these websites dictate how much they are willing to pay for a property. We see buyers completely ignore reliable data about the Sarasota real estate market because they want to believe that these national portals are more accurate. Ultimately, buyers end up making ridiculous offers that no seller will accept because of the unreliable information. 

No computer algorithm is going to be able to tell you what a property is worth. There are just too many variables. Zillow and similar sites can do a good job of providing a range of value based on location, home size, lot size, age and neighborhood. However, these sites cannot really factor in condition or property upgrades into their valuation algorithm. 

Are Zillow's Zestimates Accurate?

Below are fifteen sales in Sarasota within the last two days. I compared the actual sales price to Zillow's Zestimate. Scroll down to see the screen shots of the Zestimate value. I wanted to compare them before Zillow's database changed. 

Address Sold Price Zestimate $ Difference % Difference

91 Avenida Veneccia

 $1,175,000

 $1,079,701

 $95,299 Low

 8% Low

988 Blvd. of the Arts #914

 $840,000

 $679,677

 $160,323 Low

 19% Low

990 Blvd. of the Arts #802

 $1,264,500

 $1,180,753

 $83,747 Low

 6% Low

1525 Palmwood Drive

 $210,000

 $249,932

 $39,932 High

 19% High

2706 Robinson Avenue

 $160,000

 $227,155

 $67,155 High

 42% High

3475 Gulf of Mexico

 $7,000,000

 $4,029,958

 $2,970,042 Low

 42% Low

3700 S. Osprey Avenue #305 

 $107,500

 $84,750

 $22,750 Low

 21% Low

3953 Spyglass Hill Road

 $530,000

 $504,769

 $25,231 Low

 5% Low

4033 Arrow Avenue

 $295,000

 $279,050

 $15,950 Low

 5.5% Low

4100 Vallarta Court

 $220,000

 $206,252

 $13,748 Low

 6% Low

4502 Woodside Road

 $785,700

 $882,837

 $97,137 High

 12% High

4649 Las Brisas Lane

 $385,000

 $414,833

 $29,833 High

 8% High

7009 Prosperity Circle #2003

 $229,500

 $246,560

 $17,060 High

 7% High

7176 Del Lago Drive

 $378,000

 $424,856

 $46,856 High

12% Low

8565 Greenside Court

$787,000

$868,673

$81,673 High

10% High

Average Deviation

15%

Of the 15 recent sales, Zillow estimated low on 9 of them and high on 6 of them. The average deviation between Zestimate and true market value (sold price) is about 15%. You need to be very careful using these numbers. In most instances, you are better off listening to your Realtor when it comes to evaluating Sarasota home values. 

Sales Price vs. Zestimate

I captured screen shots of each properties Zestimate before their database updated. 

   Sold Price  Zestimate $ Difference % Difference

$1,175,000

$1,079,701

$95,299 Low

8% Low 

   Sold Price  Zestimate $ Difference % Difference

 

 $840,000

 $679,677

 $160,323 Low

 19% Low

   Sold Price  Zestimate $ Difference % Difference

 $1,264,500

 $1,180,753

 $83,747 Low

 6% Low

   Sold Price  Zestimate $ Difference % Difference
 

 $210,000

 $249,932

 $39,932 High

 19% High

   Sold Price  Zestimate $ Difference % Difference

 

 $160,000

 $227,155

 $67,155 High

 42% High

   Sold Price  Zestimate $ Difference % Difference

 

 $7,000,000

 $4,029,958

 $2,970,042 Low

 42% Low

   Sold Price  Zestimate $ Difference % Difference

  

 $107,500

 $84,750

 $22,750 Low

21% Low

   Sold Price  Zestimate $ Difference % Difference

 

 $530,000

 $504,769

 $25,231 Low

 5% Low

   Sold Price  Zestimate $ Difference % Difference

 

 $295,000

 $279,050

 $15,950 Low

 5.5% Low

   Sold Price  Zestimate $ Difference % Difference

 

 $220,000

 $206,252

 $13,748 Low

 6% Low

   Sold Price  Zestimate $ Difference % Difference

 $785,700

 $882,837

 $97,137 High

 12% High

   Sold Price  Zestimate $ Difference % Difference

 $385,000

 $414,833

 $29,833 High

 8% High

   Sold Price  Zestimate $ Difference % Difference

 

 $229,500

 $246,560

 $17,060 High

 7% High

   Sold Price  Zestimate $ Difference % Difference

 

 $378,000

 $424,856

 $46,856 High

 12% Low

   Sold Price  Zestimate $ Difference % Difference

 

 $787,000

 $868,673

 $81,673 High

 10% High

I hope you found this post information. In the future, I will write similar posts comparing various 3rd party website valuations with actual sale prices. So, check back. ;-)

Discussion

#1 By Jason Painter at 8/20/2021 6:23 AM

Yes and as a Realtor myself it's interesting to note:

1. If the Zillow estimate is low, the seller says Zillow is way off and the buyer says Zillow is right on the money.

2. If the Zillow estimate is high, reverse #1.

#2 By David Grbich at 8/20/2021 6:23 AM

Hi Mark - well written and supported with the data. It's pretty obvious why it's called a Zestimate - perhaps a good initial guide but not a solid valuation when it comes time to buy or sell!

Post a Comment