Kudos to the LA Times for bringing this forward!
Here’s an interesting article in the LA Times written by syndicated national real estate writer Ken Harney regarding Zillow pricing estimates.
LA Times: Inaccurate Zillow ‘Zestimates’ a Source of Conflict over Home Prices
When “CBS This Morning” co-host Norah O’Donnell asked Zillow CEO Spencer Rascoff about the accuracy of the website’s automated property value estimates — known as “Zestimates”!
The question posed by O’Donnell: Are Zestimates accurate? And if they’re off the mark, how far off?
Rascoff answered that they’re “a good starting point” but nationwide “Zestimates have a median error rate” of about 8%”.
But here’s something Rascoff was not asked about. Localized median error rates on Zestimates sometimes far exceed the national median, which raises the odds that sellers and buyers will have conflicts over pricing.
On the home page of the website, at the very bottom of Zillow’s home page “in small type” is the link “Zestimates.”
This section provides valuation error rates by state and county. According to the LA Times article the error rates are:
New York County — Manhattan — the median valuation error rate is 19.9%.
In Brooklyn, it’s 12.9%.
In Somerset County, Md., the rate is 42%.
In some rural counties in California, error rates range as high as 26%.
In San Francisco it’s 11.6%.
Lesson from all this?
Remember that the MLS is the gold standard of information and accuracy for appraised values.
No computerized automated system can replace the value and experience a real estate agent brings to the table.