A Wall Street Journal analysis of 1,000 recent home sales shows that Zillow’s “Zestimates” often are very good, frequently within a few percentage points of the actual price paid. But when Zillow is bad, it can be terrible — off the mark by more than 25% on one in 10 homes. In one case it was off by $2 million.
Overall, Zillow has Zestimated the value of 57 percent of U.S. housing stock, but only 65 percent of that could be considered “accurate” – by its definition, within 10 percent of the actual selling price. And even that accuracy isn’t equally distributed.
For example, 85 percent of homes in Los Angeles have Zestimates, and two-thirds have been accurate. But only 53 percent of homes in metropolitan New York have Zestimates, and only half of those are accurate.
In at least one case, questions about Zillow’s accuracy have taken on a political charge: A community activist group, the National Community Reinvestment Coalition, accused the site of discriminatory valuations in minority neighborhoods.
Resource: James R. Hagerty, The Wall Street Journal