Whether you are a home owner trying to sell your house, or a prospective buyer, you have probably spent some time on the free websites Zillow and Redfin. Both of these companies provide useful resources, particularly for buyers looking for properties out of area.
I have been using both of these sites, in addition to Realtor.com, fizbo.com and a number of others for a few years now. I’ve not really been too concerned with the valuations any of them have provided as I have, and continue to feel, that a property is worth what a seller is willing to sell it for and what the buyer is willing to pay. No more, no less. So when asking are Zillow and Redfin estimates are accurate it should be remembered that they are guidelines only.
As we are now in the process of selling, and buying, I have spent a little more time considering this question and, after communicating with Zillow extensively, and Redfin, on this issue, and testing a few things, I can tell you that, in my opinion, their estimates are basically worthless. I don’t believe they are even close to actual values in many, or most, cases. Here is how I know.
When we first listed our home in March of 2019 we listed it on a for-sale-by-owner web site at a price roughly 1/2 way between the Zestimate® and the Redfin estimate. As long as we left our price where it was, the estimates on those two sites didn’t change. In the meantime, three houses sold within walking distance of our property. Still, the Zestimate® didn’t change at all while the Redfin estimate adjusted about 1% percent down. In fact, Zillow didn’t even seem to know that the house on my street that sold was even for sale, never mind was under contract. Further, they did not seem to have knowledge that two other homes on our street had sold within the last 6 months.
Then, as summer approached, we decided to adjust our price. What we discovered then was that, despite Zillow vaunting it’s “proprietary” Zestimate® , however much we reduced our price, Zillow reduced their valuation the same amount. So did Redfin. This isn’t accurate estimating in any sense of the word. This is basic arithmetic built by someone who knows nothing of statistical analysis of property valuation.
These are not accurate estimates calculated by any fancy algorithm that considers general market conditions. We could be reducing our price for any number of reasons that do not reflect the broader market at all. If the Redfin and Zestimate® estimates are to be taken seriously then they should truly reflect the overall property market in the local area, specifically, especially when there are sales taking place in the actual neighbourhood.
Our home happens to be in the Sand Canyon area of Canyon Country, CA. The average property value in Canyon Country is less than half the average property value in the Sand Canyon neighbourhood and Zillow, in particular, seems to have a difficult time accounting for that.
Are Zillow and Redfin estimates accurate ? In summary, don’t take either the Zestimate® or the Redfin estimate seriously, regardless of what property you are considering purchasing, or selling. Do your own comparisons or get a good qualified real estate executive to do one for you.
Zillow has other software problems I’ll highlight in another article later. If you want to know more about me go to my personal web site at http://www.rheller.net/
Zestimate® is a registered trademark of Zillow.