Back in 2017, I looked at online home-value estimates and local sales to help buyers and sellers understand the numbers. Any figures and examples from that discussion describe the market then. The useful question today is still the same: what should you check before relying on an estimate?
One important clarification: a sale-to-list-price ratio does not measure valuation accuracy. It should not be compared with an automated estimate’s error rate.
Online home estimate websites such as Zillow and Trulia are extremely popular, but just how accurate is Zillow, the Zestimate, or any other online home price valuation? Not very. In fact, these computer-generated value estimates are notoriously unreliable. Zillow accuracy rates are measured on a county-by-county basis, and the company makes the data available if you know where to look. I’ll get into how accurate Zillow is in Smyrna, Murfreesboro, Nashville, and surrounding areas in a future post. But first, is there anything to be learned from Zillow-type computer-generated estimates?
Maybe
First, let me be clear about two things:
Different providers use different models and data. A statement about Zillow should not be treated as a claim about every online estimate.
2. I don’t have anything against any of the companies mentioned. I’m just here to help you sort out the facts. As a matter of fact, I have a 5-star Zillow rating and I’m a Trulia 5-star Realtor – ratings I’ve earned from my clients and that I’m happy to share.
How accurate is Zillow? If you are curious about how online estimates work and their true accuracy rates in Middle Tennessee, keep reading. First, though, it’s fair to ask: What is your accuracy rate, Mr. Realtor?
A home selling close to its asking price does not establish how accurate the original valuation was. The asking price and an estimate are different measurements. Compare equivalent data over the same period before drawing conclusions.
A home selling close to its asking price does not establish how accurate the original valuation was. The asking price and an estimate are different measurements. Compare equivalent data over the same period before drawing conclusions.
So, how Does that Compare to Automatic Website Estimates?
The popular websites vary from one site to the next, sometimes by tens of thousands of dollars, but there will only be one true value – the price a home ultimately sells for. Zillow only has accuracy data for less than half of the counties in Tennessee. How accurate is Zillow in Tennessee? In Middle Tennessee (as with most areas), the Zestimate is accurate within 5% of the actual sale price less than half of the time. That’s right, more than half the time, they’re off by over 5%. A significant portion of the time, they are off by 10% to 20% or more. But it gets even worse.
The exact Zestimate accuracy numbers in middle Tennessee are incredible. I’ll address that in this post, “How Accurate is Zillow in Tennessee?” But first, you might want to know: Why is the Zestimate so inaccurate? The answer is fascinating.
Contact me today to find out what your home is really worth.
For the provider’s explanation, see Zillow’s Zestimate information. For your property, start with a home estimate and ask me for a pricing review. I’ll help compare the details; a CMA is not an appraisal or a guarantee of a future sale price.
