The accuracy of the Zillow Zestimate is shown plainly on the Zillow website. It’s cool that Zillow shows the accuracy of their Zestimates.
The Zestimate usually puts you in the right ballpark for the value of an individual home but not always.
Zillow compares their Zestimates to the actual sale prices of homes to determine the accuracy of their Zestimates.
In Phoenix, the median Zestimate error is 6.3%. That means half of Zillow’s Zestimates in Phoenix had an error factor of less than 6.3% and half had an error factor of more than 6.3%.
So if the actual sold price of a Phoenix home was $400,000, the Zillow Zestimate is most likely to have been either $374,800 or $425,200.
Half the time, however, the Zestimate would have been closer to the actual sale price and half the time the Zestimate would have been further from the actual sale price.
So the Zestimate is typically in the right ballpark.
But not always.
One-Third Chance It’s Not In Right Ballpark
For Phoenix, Zillow says that 32% of the time their Zestimate is off by 10% OR MORE.
So if the actual sold price of a Phoenix home was $400,000, there is a 32% chance that the Zestimate was LESS THAN $360,000 or MORE THAN $440,000.
That’s what I would consider to be way off, it’s certainly not in the right ballpark for me.