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 has been many complaints from real estate agents that the valuations are far from accurate. Zillow agrees. According to their own data a median single-family house in Seattle now goes for $722,000, and the Zestimate 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.