My Zestimate is wrong, my Zestimate is keeping my house from selling, my Zestimate doesn’t show my house the right way….it’s always something with the “Zestimate”. One thing it usually isn’t is “my Zestimate is too high”. We posted an Atlanta area update on this back in early 2016, time to look at the 12/2017 data. And a spoiler; the level of accuracy from early ’16 to current is significant. And…your zestimate might be closer than you think.
Does a zestimate matter? Of course not, the market is the only true indicator of value. That said, some buyers and sellers obsess about them. The data shows that in and around Atlanta, Zillow is generally accurate with a 3 out of 4 star rating. Data shows that 54.5% of homes sell within 5% of their zestimate. Not bad for a completely computer generated opinion of value.
The break down by the six metro counties is below; 4 stars is the highest rating. The accuracy rating from early ’16 is in blue. The break down:
Cherokee – 4 stars with 66.8% (43.4%) within 5% of sale price
Cobb – 4 stars with 57.4% (42%) within 5% of sale price
Dekalb – 2 stars with 48.6% (28%) within 5% of sale price
Forsyth – 4 stars with 63.3% (47.8%) within 5% of sale price
Fulton – 3 stars with 50.8% (37.5%) within 5% of sale price
Gwinnett – 4 stars with 64.8% (43.6%) within 5% of sale price
Look at the dramatic increase in accuracy from early ’16, the algorithm continues to improve. Of the six counties that are generally considered to comprise the Atlanta metro area, four have the highest Zillow ratings. These numbers are actually among the top quartile for the nation, not bad. But yet and still, Zestimates remain scorned and ridiculed by most. The obvious reason is that this is so personal; this is YOUR house!
But an understanding of the process might help. Zillow describes their Zestimate:
The Zestimate® home valuation is Zillow’s estimated market value, computed using a proprietary formula. It is not an appraisal. It is a starting point in determining a home’s value. The Zestimate is calculated from public and user-submitted data, taking into account special features, location, and market conditions. We encourage buyers, sellers, and homeowners to supplement Zillow’s information by doing other research such as:
- Getting a comparative market analysis (CMA) from a real estate agent
- Getting an appraisal from a professional appraiser
- Visiting the house (whenever possible)
Zillow also produces a Zestimate forecast, which is Zillow’s prediction of a home’s Zestimate one year from now, based on current home and market information. Learn more about the Zestimates.
In the end, keep Zestimates in context. They are a very broad starting point, they do not mean the house is “worth” it and they have no bearing on the actual value of a home. The market – BUYERS – are the ultimate indicator of what a home is worth…and that is a constantly moving target…so who really knows what it’s worth!