I have people ask me about Zillow all the time. In fact, it came up last week at a discussion I led for Realtors. Is Zillow accurate? Do I use Zillow as an appraiser? Let me share 10 recent appraised values in 2013 and compare them with “Zestimates”.
1) Elk Grove Condo: Appraisal: $90,000; Zillow: $79,454 (-11.7%)
2) Rancho Cordova House: Appraisal: $172,000; Zillow $155,567 (-9.5%)
3) East Sacramento House: Appraisal: $315,000; Zillow $399,893 (+26.9%)
4) Elk Grove House: Appraisal: $262,000; Zillow: $267,676 (+2.1%)
5) South Land Park House: Appraisal: $217,000; Zillow: $273, 293 (+25.9%)
6) Roseville Condo: Appraisal: $111,500; Zillow: $113,914 (+2.1%)
7) Roseville House: Appraisal: $415,000; Zillow: $396,763 (-4.4%)
8) East Sacramento House: Appraisal: $232,000 ; Zillow: $368,000 (+36.9%)
9) Elk Grove House: Appraisal: $305,000 ; Zillow: $264,340 (-13.3%)
10) Del Paso Heights House: Appraisal: $65,000 ; Zillow: $76,348 (+17.4%)
Is Zillow accurate? It’s hit and miss. Ultimately I don’t consider Zillow to be reliable. As you can see above, some of the values were really close, but others were not close at all. An online valuation site cannot possibly know the idiosyncrasies of a real estate market – not to mention interior condition, level of charm or quality of updates either. Sometimes tract neighborhoods with a high level of data seem to have more accuracy on Zillow (not always true), while neighborhoods where each street and house are different can be very far off (even hundreds of thousands of dollars off the mark). For instance, in Yolo County data can be very sparse, so an online “valuation” without actual data isn’t all that compelling. I would say if you use Zillow regularly, use it for what it’s worth, but understand its limitations.
Do I use Zillow in my appraisals? I never use Zillow to guide or support values in my reports. Sometimes out of curiosity I will check Zillow because I wonder how a lender might view a property if they run an AVM (Automated Valuation Model).
By the way, I don’t have any problem with Zillow. This post is simply written as an FYI for clients and consumers.
Questions: How do you use Zillow? Any comments or stories to share?
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I guess the saying, “You get what you pay for,” really applys with these types of services. They should display a header “For Entertainment Purposes Only.”
Thanks Michael. They probably have some sort of disclaimer on there. I know people who get stressed about their Zestimate going up and down. It can be manic to look online and put so much confidence in a number – even if that number was 100% accurate. We live in wild times where accessing instant information is the name of the game.
I completely agree with you about Zillow. On a personal note, we recently inquired about a re-fi with a local lender and to my surprise, the lender emailed a link to our property on Zillow. To be honest, I was a little surprised to see that Zillow was being used as a reference tool in a real life situation, and we decided to stop the conversation right there… And yes, the figure on Zillow ended up being incorrect. No surprises there.
Interesting. Thanks for sharing your story. It’s not a total surprise to hear things like this because Zillow is the only valuation context that many people have – particularly loan officers if they don’t have access to MLS sales. Do you end up going with that lender or cut things off on the spot? I wasn’t too sure based on your comment.
I see. Sorry for the lack of clarity. We cut things off on the spot and we also decided that now is not the right time for a re-fi.
Got it. Thanks Coronado. I appreciate it. Good luck with any future refinance you do.
In my market, Tampa Bay, most Zestimates are coming low right now. I believe there is a reason for that. If Zillow relies on sales recorded in the public record, the information may be old in a market that’s moving fast. It takes two months for sales to be recorded in my county. Appraisers and brokers have access to the MLS which gives them a more accurate picture and more recent comparables. My two cents.
Thanks so much Jana. I appreciate your two cents, and I think you bring up a valid point. I was just reading on Inman News today about a study done of Zillow and Trulia that shows many properties as listed for sale on their sites were actually already closed. This helps further illustrate your point I think. Here is the article I was reading. Thanks again for your insight. http://www.inman.com/news/2013/03/6/accuracy-zillow-trulia-listing-data-under-fire-again