In June 2019, Zillow made a major update to how they calculate Zestimates for houses listed for sale. In addition, they now report the accuracy of the Zestimates for houses “Listed for Sale” separately from houses “Not Listed For Sale.” Check out this post for more details.
Here’s a post from 2018 with a discussion of Zestimate median errors.
# # #
4 Responses to Zillow Zestimate Accuracy Calculator – 2019
I don’t know if anyone noticed yet, but they also introduced a major flaw. In June 2019 my Zestimate just dropped by -35.6%! Apparently they show now “Market appreciation” value for former foreclosures or otherwise distressed homes in certain zip codes at least. My rental in a close by neighborhood (same zip code) shows the same decrease in Zestimate. The price for comparable homes is still 100% higher, though, but not shown as Zestimate. My neighbor bought his house back in 2012 storm damaged for next to nothing and the price Zestimate now dropped probably 80% to $24.000!. Two houses down a similar home is currently on the market for $172.000. Go figure!
Surprisingly, a foreclosure I bought in 2012 in a better neighborhood (different ZIP) does not show these changes, which I find weird and have no explanation yet. Do you think it is an odd “AI error”, or could there be more to it? What benefit would it have to keep house prices down in more distressed areas of town?
This can’t be good for house prices and the recovering housing market. Have you heard about this phenomenon? I think it should be publicised.
Hi John, I got in contact with Zillow and they requested the property details. I gave them all 4 examples I found. As you can see in their standard reply letter, Zillow couldn’t care less! Alas, the property values of course didn’t revert to their original values.
It will be interesting to see if it is a more widespread phenomenon. May be someone will sue them again like in 2017 🙂
Thank you for providing us with this information and I’m sorry for the delay in my response as we investigated this matter. The Zestimate is an estimate derived from our proprietary algorithm, which includes physical attributes, tax assessments, and prior and current transactions. The Zestimate is simply an estimate using the best information available to us. Please know that we do not intend for the Zestimate to replace a comparative market analysis as they can take into account market intricacies that the Zestimate cannot.
Market appreciation estimates, local tax assessments and comparable homes are all factors that the algorithm considers when calculating a Zestimate. Additionally, the accuracy of the market appreciation estimate may be affected if:
The last sale price is incorrect
The home has had a major remodel since the last sale
The home’s value is significantly above or below that of typical homes in the region
The neighborhood’s market value has shifted significantly compared to nearby neighborhoods since the last sale
While we do not directly edit or remove Zestimates, ensuring that all of your property facts are up-to-date is the best way to provide a more complete summary of your property’s value. We recommend reviewing your home facts to ensure that they are complete and correct as these play a role in the calculation. You can edit them at the following link:
I hope the information I provided today was helpful in addressing your concerns; however please do not hesitate to reply to me with anything more you would like to discuss. Thank you for your time.
Consumer Care Advocate
Visit our online help center: http://www.zillow.com/help/
Wow! Thanks for the comment. I’ll guess that it’s a bug in the new algo and they’ll eventually fix it. Let me know if the Zestimate changes.
Zillow says that nationally the median Zestimate error for Off-Market houses is 7.7%. However, 19.5% of their Off-Market Zestimates are off by more than 20%. But your example is so big it sounds like a bug that can be fix, or at least dramatically improved.
Comments are closed.