You’ve probably looked at a Zestimate. Maybe it was for your own home, or maybe it was for a home you were thinking about buying. You’re not alone: Zillow says it gets 195 million unique visitors a month to its website. Zestimates — Zillow’s computer-generated estimates of a home’s value — are as popular as they are controversial. If your home’s Zestimate is high, you’re probably a happy homeowner. If it’s low, you’ve probably cursed Zillow, the real estate industry and maybe the internet itself!
No matter how popular or controversial Zestimates are, there’s a more important question: Are they accurate? And more specifically for local readers:
How accurate are Zestimates in the Tri-Cities?
We set out to answer that question, and today we’re excited to share the results of our research:
For five straight months this year, we tracked the actual sales price of Tri-Cities homes on their closing date and compared it to the Zestimate that showed on Zillow.com on the same day. Our research covered 532 homes across the Tri-Cities, and reveals the following:
- Tri-Cities’ Zestimates have a “median error rate” of 5.6%, meaning half of the Zestimates are wrong by more than 5.6% and half are wrong by less. On a typical Tri-Cities home with a $300,000 sales price, this means there’s a 50% chance its Zestimate is at least $16,800 wrong.
- Tri-Cities Zestimates are worse than Zestimates across Washington state (2% median error rate) and the U.S. (4.5% error rate). Both of those are Zillow’s self-reported figures.
- Pasco Zestimates (2% median error rate) are significantly more accurate than Kennewick (7.7%), Richland (8.2%) and West Richland (8.7%).
- Across the Tri-Cities, about 16% of homes had Zestimates that were at least $50,000 wrong.
- The more expensive a home is, the more inaccurate its Zestimate is. Homes that sold for $300,000 to $399,999 had a median error rate of 7.2%. Homes that sold above $400,000 had a 7.5% median error rate. Homes that sold for $225,000 to $299,999 were the most accurate, with a 3.3% median error rate.
Zestimates are wrong for a variety of reasons, but often because a computer algorithm can’t see a home’s true condition to gauge its value in the market. Recent upgrades might make a home more valuable; on the flip side, aspects of the home that may be in need of repair or replacement might make it worth less. This is why we encourage homeowners to rely on the professional evaluation of a licensed Realtor® when determining a home’s value.
We’ve presented the full results of our study today with separate sections examining Zestimates across the Tri-Cities as a whole, as well as Zestimates in Kennewick, Pasco, Richland and West Richland specifically. There’s also a page offering key takeaways and a detailed explanation of our methodology.
If you have any questions about the study, or about your home’s value, contact us via the form below.