Zillow Zestimate - Who are these people kidding?

This is worse than the Government Unemployment Data!

Here we have a company who gives out free values based on a "Proprietary Formula" that doesn't work as well as throwing darts at a list of values behind your back. It cheats both the home buyer and home seller by presenting inaccurate data as fact.

In Phoenix, the Zestimate is within 5% of the sales price 41.6% of the time.  That means that if you are selling a house for $200,000, the Zestimate will say it is worth between $210,00 and $190,000 less than half the time.  The rest of the time is is off by nearly twice that amount.

This is what the Zillow website says on its own web page:

Nationally, the Zestimate has a median error rate of 6.9% percent, which means half of the Zestimates in an area are closer than the error percentage and half are farther off. For example, in Seattle, Zestimates for half of the homes are within 6.2 percent of the selling price, and half are off by more than 6.2 percent.

This is a case of statistics being very misleading.  Let's look at an example that uses 6.9% as the "median error rate".

If Zillow values your home at $200,000, its true market value may be $213,800 or it may be $186,200.  That is a difference of $27,600.  

I don't know about other Realtors, but if I was off by $27,000 on a value that I put on a home, I shouldn't be in the profession!

And neither should Zillow.


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