How close is a Zestimate Estimate?
June 14th, 2011
One of the top real estate websites is Zillow. As a Premier Agent for the Metrowest Boston area on Zillow, I understand that this is a site that gets searched very often by home buyers. Therefore, I ensure I have my listings advertised in this space.
The gimmick tool on Zillow is what they call a Zestimate. The computer uses public data to evaluate every single home and gives the consumer a Market Value, which they term a Zestimate. Since the consumers mention this number often, we as Realtors need to be aware of it.
Zillow discloses how accurate their Zestimates are compared to selling prices, and they break this down to the geographic regions. Bravo Zillow!
How close are Zestimates to actual Selling Prices in MA?
In all of Massachusetts, there are 2.2 Million homes posted on the site, and 2.1 Million have Zestimates. Here is how close the Zestimates were to the properties that were on the market & sold:
Within 5% of Actual Selling Price 38.4%
Within 10% of Actual Selling Price 62.7%
Within 20% of Actual Selling Price 80%
Median Error is 7%, which means that half the Zestimates are within 7% of the selling price and half are off by more than 7%.
To people who are selling their homes out there… this is not a weather forecast where being wrong on pricing will mean you get your hair wet. Using a Zestimate rather than the skills of a professional local Realtor to evaluate your home’s value is a bad gamble.
These margins of error are too great to use Zillow’s Zestimate as anything but a fun conversation piece of info at a cocktail party. When ready to list a home or go purchase a home around the Metrowest Boston area, call on The MAhome Team of Realty Executives to get you a free market evaluation on the home’s value.
Ed and Doriane Daniels, the MAhome Team of Realty Executives, can be reached at 508-341-7880 for any questions about the housing market for Metrowest Massachusetts. As full time Realtors in Massachusetts, they have worked with almost 200 buyers and sellers of local homes.
Categories: Real Estate
This entry was posted on Tuesday, June 14th, 2011 at 1:49 pm and is filed under Real Estate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
The zestimate should be a conversation starter. It allows customers to have some sort of expectation about what price their home is. It isn’t until a realtor or an appraiser does an actual valuation that a true price can be determined.
I think informed customers are great and it is our job to show them that extra 10% that the zestimate is missing.