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Our area in SoCal has a lot of high-end custom homes, so Zillow estimates around here can be pretty off-base. Since we're also a beach city, just the value of the land can vary plenty as you get closer to the beach or if there's a potential for ocean views, and Zillow doesn't seem to do a good job with those factors either. I've even seen some human appraisers get things really wrong around here, especially if they're not that familiar with the area.
The problem is not Zillow but home owners who are pre-occupied with tracking how much their home has increased in value in the past 1 week. A good chunk of Zillow web traffic seems to be this demographic.
We recently (August) purchased a home.
The appraisal came in $4k over the selling price.
Realtor shows the value at $2k under the selling price.
Zillow shows the value at $3k over the selling price.
Not too far apart but doesn't mean anything as we aren't going to sell.
Although some sellers take it too seriously. I followed up on an old seller lead just yesterday, and he told me if I had a buyer he would sell, but not for a penny less than 360k because that's what Zillow had it valued at.
I looked at comps and I figure at 325k he'd be doing pretty good, even right now. Then again, it's a wild market so you never know.
I find that seller ridiculous. How could anyone possibly expect Zillow can estimate the exact worth of a home never having set foot on the property? Zillow doesn't know the condition of the roof, can't see if my neighbor is a hoarder with junk all over the lawn, can't tell if the kitchen or bath has been upgraded or needs to be, etc, etc.
Zillow is accurate for trac homes in large neighborhoods, but that's about it. Custom homes or small towns without a lot of sales it's not going to be accurate at all. All it does is average out sold prices, it knows nothing about the condition of your home.
They are also in the real estate business, so if a house 'zestimate' is $300k and it is posted for sale for $350k, then that Zestimate will change to match, regardless if it is over priced.
For several years, Zillow had my house listed for half of what I had paid for it as new construction. They somehow were using comps from a neighboring city with significantly lower property values rather than the city I was actually in. I finally reached out to them to correct the city they were listing me in, and then my Zestimate finally matched something approaching a reasonable, if generic, amount in what was a new build community so the Zestimates weren't completely off base.
Interestingly, they also wiped out the Zestimate history so that entire couple of years where it was completely wrong disappeared.
It's all local, seriously. If Zillow isn't accurate for you in terms of Zestimates (which is really what most seem to have a problem with), that's one thing. But where I have lived, Zillow has been largely on point with their estimates.
I also use Zillow for searches of properties to rent and buy, which has been helpful.
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