How Accurate are Zillow's Estimates? - Orchard (2023)

Zillow is a popular online real estate platform perhaps best known for providing “Zestimates,” or, estimations of a home’s value. Zillow calculates Zestimates using a proprietary algorithm that analyzes various factors such as location, size, age, and recent sales of comparable homes in the area.

While Zestimates can be a useful starting point for homeowners and buyers to get a sense of a property's value, they are subject to inaccuracies. Homeowners and buyers should use Zestimates as a general guide, and consult a licensed appraiser for a more accurate and unbiased estimate of how much their home is worth.

What is a Zestimate on Zillow?

A Zestimate is an estimated market value for a property, calculated by Zillow’s proprietary formula that takes into account various factors, like:

  • Location of property
  • Size of property
  • Age of property
  • Condition of the exterior of the home
  • Recent sales of comparable homes in the area

Many homeowners use Zestimates to valuate their homes; however, a Zestimate is not an official appraisal of a property. The formula is unable to account for other factors that can have a significant impact on home value, like:

  • Condition of the interior of the home
  • Upgrades or renovations
  • Unique features or amenities
  • Recent fluctuations in market conditions

As such, a Zestimate is only a starting point in determining a home's value. The only way to determine your home’s true value is to get a professional appraisal.

How does Zillow estimate home value?

You may never have questioned the number that pops up after typing in your address to Zillow’s home valuation calculator, but how does the process work? It starts with a proprietary algorithm that pulls data from public property records, tax records, recent home sales, and user-data. The algorithm analyzes these factors and incorporates machine learning for added accuracy.

The process has three steps:

  1. Data Collection: Zillow’s algorithm gathers data on the property, including its address, square footage, number of bedrooms and bathrooms, and other relevant features from public records and user-data.
  2. Home Value Modeling: The algorithm uses this data, along with information on recent sales of comparable homes in the area, to create an automated valuation model (AVM) that predicts the property's value.
  3. Refinement: The algorithm refines the statistical model based on new data and user feedback, in order to improve accuracy over time.

Related: Here are 10 alternatives and competitors to Zillow

How does Zillow measure accuracy?

Zillow boasts that for most major markets, Zestimates are within 10% of the final sale price of on-market homes 95% of the time. They also report that Zestimates have a nationwide median error rate of 2.4% for on-market homes and 7.49% for off-market homes —eaning that half of all homes are within the error rate, and the other half are not.

As you can see, there is a wide range of variability in Zillow’s estimates, so what influences whether or not your Zestimate is reliable?

What impacts Zestimate accuracy?

Zestimates are dependent on public data and records and therefore, subject to inaccuracies. For example, in a neighborhood where a home hasn’t been for sale in many years or fewer home sales in general, recent sales prices will be out of date, skewing the Zestimate.

While Zillow states that Zestimates are within 10% of the final sale price of on-market homes 95% of the time for most major markets, the error rate can be significantly higher for non-major markets and more remote locations. If you live in a small, obscure town, the Zestimate on your house is more likely to be inaccurate than if you lived in a major city.

Zillow provides a "Zestimate Accuracy Table" on their website, which shows the median error rate for Zestimates in different states and counties throughout the United States. Homeowners and homebuyers should use this information to get a sense of how accurate Zestimates are likely to be in their local area.

What’s the most accurate home value estimate?

While a Zestimate may satisfy your curiosity, it won’t satisfy your lender when determining whether or not your home is adequate collateral for a loan. So if you need an accurate home value, like when applying for a home loan, you’ll need to hire a licensed appraiser.

Your appraiser will physically inspect the property, take into account its unique features and condition, and use comparable sales in the area to arrive at an unbiased and accurate estimate of the property's value.

However, professional appraisals can cost as much as $300 to $400 and are typically only used in specific situations, like when a home is being bought or sold, or when a homeowner is refinancing their mortgage. Consulting a real estate agent can also be more accurate than a Zestimate. Just note that agents will give you the market value — or, how your house could sell for — which is different from the appraised value of your home. If you need an official valuation, you’ll have to hire a professional appraiser.

For homeowners and buyers who are looking for a free and convenient way to get a sense of a property's value, online valuation tools are often adequate. But not all tools are created equal. For example, Orchard’s free online home valuation — our estimates are 30% more accurate, thanks to a patented AVN model, which you can read more about here.

How Accurate are Zillow's Estimates? - Orchard (1)


Here are some more details about the accuracy of Zillow’s estimates.

Is Zillow Zestimate usually right?

Zestimates are mere estimates of a property’s value, not a true valuation. As such, you can expect your Zestimate to be around your home’s value, but don’t expect it to be exact. Additionally, if your home is in a remote area or there haven’t been recent home sales in your neighborhood, the Zestimate is likely to be more inaccurate. That’s because the algorithm can’t conduct an accurate comparative market analysis — a crucial step to valuating a home.

Are Zestimate usually higher or lower than others?

Zillow's Zestimate can be higher or lower than other estimates of a home's value, depending on the specific property and the local real estate market. The company itself acknowledges that its Zestimate is not always accurate, and it provides a range of the estimated value as well as a "Zestimate Accuracy" score for each property. These tools can help provide more context for your Zestimate, and help you determine if it’s on the higher or lower end of the range for your home.

Why is Zillow Zestimate inaccurate?

The most common reasons for inaccurate Zestimates are limited data, market volatility, and data errors. It’s important to remember that your Zestimate is only an estimate based on a proprietary algorithm and the information it's fed. If there are inaccuracies in that data, the Zestimate will also be inaccurate.

What are some alternatives to Zillow's Zestimate?

There are many other online home estimators. Read the fine print of these valuation tools to understand if they are a reliable source of data for your neighborhood or not. When in doubt, consult a professional. You can also get an free estimate of your home's value with Orchard. Get started.


How Accurate are Zillow's Estimates? - Orchard? ›

Zillow boasts that for most major markets, Zestimates are within 10% of the final sale price of on-market homes 95% of the time.

How reliable are Zillow estimates? ›

How accurate is the Zestimate? The nationwide median error rate for the Zestimate for on-market homes is 2.4%, while the Zestimate for off-market homes has a median error rate of 7.49%. The Zestimate's accuracy depends on the availability of data in a home's area.

Why is my Zillow estimate wrong? ›

If your home has additions or renovations that don't show up in the data, then its estimated value will not reflect those changes. Errors do happen, so your value also may be low because of outdated or incorrect information about its previous sales prices or tax history.

Which online real estate estimate is most accurate? ›

  1. Redfin. The most accurate home value estimator is Redfin, as it uses historical pricing data and also considers real-time demand and market trends. ...
  2. Zillow. ...
  3. ...
  4. Trulia. ...
  5. Ownerly. ...
  6. Chase. ...
  7. RE/MAX. ...
  8. Homelight.
Jul 31, 2023

Is Zillow accurate in rural areas? ›

The Zillow Zestimate calculates the estimated price of a house based on nearby sales. While this works OK in subdivisions and populated areas with many recent comparable sales, it does not work great in rural areas.

Are Zillow estimates usually high or low? ›

These numbers show that the Zestimate is generally pretty good at getting within 20% of the market price, gets it within 10% a little more than half the time, and only gets it within 5% a third of the time. Roughly 20% of properties are off by 20% or more.

Are Zillow estimates too high or too low? ›

Several studies demonstrate that it's possible Zillow can be accurate within 80-90% of the value of a home. This means that its estimates can be a good starting point. However, when you want to price a home to sell or know what a home is worth so you can buy now, its numbers are not accurate enough.

Are Zillow estimates inflated? ›

The Zestimate is often less accurate than your Realtor's estimate and can be thousands of dollars off. According to Zillow's Zestimate page, “The nationwide median error rate for the Zestimate for on-market homes is 1.9%, while the Zestimate for off-market homes has a median error rate of 7.5%.

Why is Zillow estimate so much higher? ›

The more guesses the algorithm makes, the greater the margin for error. Zestimates are also highly sensitive to market trends. If the real estate market in your area is highly competitive, then the Zestimate for your property will continue to rise.

Is Zillow higher or lower than appraisal? ›

How Accurate Is Zestimate vs Appraisal? A professional real estate appraisal is far more accurate than a Zillow Zestimate. You should keep in mind that Zestimate is just an estimate based on available data, and will often miss vital information on a home's condition and renovations.

Why are Zillow estimates higher than realtor? ›

It's also worth noting that Zillow uses data from a much larger geographic region than what a traditional realtor or appraiser would use — instead of just using comps from your neighborhood, Zillow can pull data from an entire county to calculate its Zestimate.

What is the most accurate estimation? ›

Parametric estimation is an extremely precise way of estimating a project. Whether you're looking at timeline, cost, or resource requirements, parametric estimates are more accurate than other forms of estimate because of how they are calculated.

Which estimate is most accurate? ›

A detailed estimate is the most accurate method and consists of working out the quantities of each item of works and working the cost. The dimensions are taken directly from the drawings and quantities of each item are calculated.

How does Zillow predict home values? ›

The Zestimate is calculated through a Zillow algorithm that crunches data from public property records, tax records, recent home sales in the area, and user-submitted information to come up with an approximate market value for a home.

What if my home location is wrong on Zillow? ›

To alert Zillow of an incorrect property address:

Navigate to the property page with the incorrect address. Select Report problem with home, and follow the prompts to report incorrect information. You will be asked to confirm whether or not you are a consumer or Real estate professional.

What is the Zillow scandal? ›

Zillow took a $304 million inventory write-down in the third quarter, which it blamed on having recently purchased homes for prices that are higher than it thinks it can sell them.

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