Q & A Saturday – Are Zestimates Accurate?

Welcome to our Q & A Saturday video.

In these Q & A Videos we will answer your questions about real estate.  Any real estate related topic from questions about selling your house, buying a house, real estate investor questions, land lording questions, local market questions and many others things are all fair game. 

Today’s question is “Are Zestimates Accurate?

Zillow Zestimates: Any Good? - MA and NH Real Estate

In this video Shaun discusses Zillow and the accuracy of their Zestimates especially in our local areas.

 

Some of the main points covered in this video are:

1)      Zillow admits that Zestimates can be inaccurate

2)      The ratings Zillow gives for Zestimates in the counties in Eastern Massachusetts and Southern New Hampshire

3)      The reported errors for a few of these, most are well over 10%

4)      How Zillow uses county wide data in their calculations
                – “Geographically, the data we use is much larger than your neighborhood. Often times, we use all the data in a county for calculation. So though there may be no recent sales in the “neighborhood”, even a few sales in the area allow us to extrapolate changes in the local housing market.” Zillow.com

 

5)      Why using Zestimates should only be used as a first glance ball park when looking to buy or sell a house

 

 

The use of Zillow and its Zestimates has become more common in recent years as Zillow has become bigger and better known.  Zillow is great at marketing itself and to get support from many industry leaders to use and advertize on it which increases its credibility.  It also does have many useful features that can help buyers and sellers do some basic research.  However the Zestimates can be pretty inaccurate much of the time.  Some places will do better than others, even in a fairly tight region and if you don’t know the error in your location it can be very bad to put much weight at all on Zestimates.  For example if you lives Rockingham County, NH the median error is 6.5% so half of the houses are selling for a difference less than 6.5% (You can think of that as $19,500 on a $300K home) which isn’t terribly far off.  However you can go not very far to Middlesex County, MA and the median error is 13% which is pretty huge (That is now $39,000 on that same $300K house!).  In conclusion Zillow itself can be a pretty helpful resource and their Zestimates can be a useful first step in looking into the value of a house, but they are just to inaccurate to use for anything other than a ball park estimate.

 

Hope you enjoyed the video and leave any other questions you have about the topic below or any other topics you would like to see covered in future videos.  I encourage anyone that has things they would like to talk about to let me know what they are.  You can always fill out a contact us form here and put Q & A in the subject, just leave a comment with your questions below here, send an email to info@masshomesale.com, or post it on our Facebook page or Twitter account.

 

Resources mentioned in the video and some other useful resources and good articles:

–          Zillow’s Zestimate accuracy data for Massachusetts

–          Zillow’s Zestimate accuracy data for New Hampshire

–          Zillow’s FAQ’s on Zestimates

–          LA Times article on inaccuracies seen in Zestimates and their problems

–          Another good Video about Zestimates

 

 

 

(Image Credit: Adaptation of “Zillow-App-Icon“)

 

 

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