If you rely on Zillow’s Zestimates®, a property’s market value is wrong way too often.
A friend clued me into the truth recently, telling me that Zillow itself — commendably, I have to say — reveals its calculations of Zestimates’ accuracy on the company’s Web site.
Although I have hardly been a lone critic of Zestimates, I was stunned by what I learned on the site.
Zillow acknowledges that 76.4 percent of its Zestimates in metropolitan New York City come within 20 percent of the sale price.
Therefore, 23.6 percent do not come within 20 percent of the sale price. And that’s no Cartestimate.
Only 52.8 percent fall within 10 percent and 29.1 percent, within 5 percent.
The acknowledged median error is 9.3 percent, meaning half of the statistics are even worse.
Moreover, New York is not the metro with the worst record of accuracy. Dallas-Ft. Worth holds that dubious distinction with a median error of 12.3 percent.
In my book, none of the numbers inspires confidence, especially since Zillow claims the following:
A Zestimate home valuation is Zillow’s estimated market value.
If the figures that Zillow provides are used by consumers to value a home, whether as buyer or seller, they’d probably do just as well throwing darts at a page of classified real estate ads.
Looking at Zillow’s slogan, I’d say it implies that using Zestimates would most often amount to a sword with two edges.
Tomorrow: The day the music stopped
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Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022