I looked at 12 homes from TREND MLS sold over a 17 day period. Of the 12 homes Zillow's "Zestimate" exceeded the sales price in 7 cases and was under in 5 cases. I also looked at the Municipal value assessment used for tax calculation. In 7 cases those numbers exceeded the sales price. (In 5 instances they were the same homes for which Zillow over estimated. Remember, though, that the assessment number doesn't change till a new assessment - there can be years between assessments so given time in an increasing market the assessment will be under value. It can be useful though in looking at RELATIVE values within the town.
There has been a lot of talk about the accuracy of Zillow's "Zestimates". Zillow claims on its website that "Our data shows that half of all sales are generally above the Zestimate.". This small sample is not inconsistent with that claim. It is worth noting, though, that any type of average is just that - an average. In one of the 12 cases Zillow's "Zestimate" exceeded the sales price by nearly $120,000. Did someone get a really good deal? Maybe. At the other end, the largest under estimate was just about $25,000. In 6 cases the final sales price may not tell the entire story as in 6 cases the seller paid some of the buyers closing costs. We don't know, though, whether those closing costs were part of the original contract or were part of a negotiation to resolve home inspection issues.
I give my clients a copy of the price history of homes we look at and, when it is offer time, a copy of the price history of homes used as comps. If it is fair to claim 'Zestimates' are not accurate then maybe we should look at the original sales price and the price history" of the 12 homes used here. For each home below, ACT is the beginning price and STL is the final sold price. Changes with corresponding dates are shown.
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