Posted on by Rob at 714Web
Thinking about using Zillow to find the value of a property? If so, you might be wondering what the controversy with Zillow estimates is and whether the platform is worth using.
In this post, our Houston real estate experts at Your Home Sold Guaranteed Realty - Chris Schmidt Team will discuss the issues with Zillow and how accurate its estimates are for Houston homes.
Key Takeaways:
- While it’s true that Zillow estimates are largely inaccurate, they’re a good tool for homeowners and buyers who are just starting their real estate journey and want a rough idea of a home’s market value.
- According to Zillow, the error rate for estimates nationwide is 2.4% for on-market homes and 7.49% for off-market homes.
- In Houston specifically, the median error rate is 2.23%, based on data from 30,8000 homes. 81.07% of homes that were sold in Houston had a Zillow Zestimate that came within five percent of the final sale price.
What is the Controversy with Zillow Estimates?
If you ask almost any realtor, they’ll say the controversy with Zillow estimates is that they’re inaccurate. As a result, the platform can give homeowners or prospective home buyers unrealistic expectations about how much a home is worth.
While it’s true that Zillow estimates are largely inaccurate, they’re a good tool for homeowners and buyers who are just starting their real estate journey and want a rough idea of a home’s market value.
According to Zillow, the error rate for estimates nationwide is 2.4% for on-market homes and 7.49% for off-market homes. Zillow’s estimates can be higher or lower than a home’s actual market value, though they tend to skew higher.
The reason Zillow’s estimates are so inaccurate is that they’re based on algorithms that analyze user-generated and publicly available data. This means the pool of data it can access is relatively limited, especially compared to the information realtors can find.
An algorithm-based method is an ineffective way to predict market value because it can’t take into account:
- Unique characteristics of individual homes that might affect home value
- Recent renovations, improvements, and upgrades
- Current housing market trends, especially if they change frequently
Zillow’s system is only as accurate as the data available to it. So if a certain area lacks data, the home value estimates are likely to be off.
How Accurate are Zestimates in Houston?
In Houston specifically, the median error rate is 2.23%, based on data from 30,8000 homes. 81.07% of homes that were sold in Houston had a Zillow Zestimate that came within five percent of the final sale price.
94.35% of homes came within ten percent of the final sale price, and 98.40% of homes came within twenty percent of the final sale price.
In Texas more broadly, Zillow has a median error rate of 2.26%, based on data from 129,9000 homes.
Get an Accurate Home Valuation with the Best Realtor in Houston
A Houston realtor is essential for determining accurate market value. At Your Home Sold Guaranteed Realty - Chris Schmidt Team Chris Schmidt and our team have years of experience working in the Houston metropolitan area.
Our familiarity with the local market trends, as well as our legendary customer service, are why we’ve developed a reputation as the best realtor in Houston. We can easily help you determine the market value of a home in Houston, whether you’re buying, selling, or are a current homeowner.
To learn more about working with our team, give us a call at 713-322-5604. You can also fill out the form on this page or send a message to [javascript protected email address].
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