Are Zillow Zestimates accurate? There are a couple of things you need to understand to answer that question. First of all, Zestimates are based on an algorithm that considers two factors into consideration when making its calculation: comparable sales and public data (e.g., tax records). This works great if you’re in Ventana or northwest Santa Rosa where the neighborhoods and houses are very similar. In this case, the only thing you’d worry about messing up your Zestimate would be a neighbor updating their kitchen.
Where Zillow runs into trouble is when it has to do “gray area” evaluations, or evaluations they don’t know what to do with. For example, say you have a country property with an unpermitted building you use for agriculture. Zillow doesn’t know the difference between five acres here and five acres there. It’s looking at aerial photos and taking certain things into consideration, but it’s by no means making a complete valuation.
The thing you really need to remember, though, is that Zillow only looks at the past. It doesn’t look at the future, so it doesn’t consider the velocity at which things are moving in the market. There are certain considerations only your agent will know. Say the property down the street sold last month, but there’s been a massive spike since then and the last house that went on the market received 10 offers. As far as Zillow knows, it’s under contract for the price it was listed for, not the real price it’s being sold at.
All of these things will affect your home’s value, but understanding how they play out will help you determine whether or not it’s time to sell, what your home’s value is, and what you’ll walk away with. Not to mention all the other questions that come up in a market like this.
If you need help with your Zestimate or have questions about this topic, don’t hesitate to reach out to me. I’d love to help you.