Don’t put too much stock into Zillow’s Zestimate, it is not as accurate as you think. The typical error is about $40,000 for a single-family house sold in Seattle. Since the Zestimate computer-generated estimates began in 2006, there have been many complaints from real estate agents that the valuations are far from accurate. Zillow agrees with the inaccuracy of the reports. According to their own data a median single-family house in Seattle now goes for $722,000, therefore an error rate is 5.4 percent. That’s a difference of about $39,000!
The Zestimate home valuation algorithm is important data for homeowners, sellers, and buyers, which is why the Seattle-based company launched a new contest to improve its Zestimates model. With a top prize of $1 million!