GREENSBORO, N.C. — Since the real estate market started going crazy, so many people have been sitting at home checking Zillow. Watching the value of their home go up, up, and up, and wondering if they should sell their place.
Before considering that, we need to know, how accurate is Zillow's estimate?
Zillow's website says they crunched the numbers to test their so-called 'Zestimates' in 2021. Back then, they estimated the prices of 3.6 million homes across North Carolina that were currently off the market but eventually sold.
Forty percent of the homes sold within 5% of the estimate.
That means if a home was estimated at $300,000, it sold between $285,000 and $315,000.
Sixty-four percent of the time, Zillow's estimates were within 10%.
So, that $300,000 went from $270,000 to $330,000.
And 83% of the time, the "Zestimates" were within 20%.
That range now becomes $240,000 to $360,000 -- for a $300,000 estimate. A much larger margin.
Zillow says it uses "state-of-the-art statistical and machine learning models that can examine hundreds of data points for each individual home."
Why a realtor says you shouldn't take Zillow's estimate at face value
"It is just a starting point for conversations. It is not something you should consider your home to be worth by any means," said realtor Ty Cannon with Berkshire Hathaway.
Cannon adds that there's one big problem with Zestimates: Homeowners can go in and change the data about their houses.
"If you're not exactly sure what the total square footage of your home is, and you think it's larger than what Zillow has it listed, you can go in there and manipulate that square footage. You could say, my home really has five bedrooms because that bonus room could be a bedroom. So you change that Zillow information input sheet. That's going to change the Zestimate of your home when theoretically, you would not be able to sell your home for five bedrooms because your permit is not for a five-bedroom home," Cannon said.
You might not do that, but your neighbors could. Their higher prices would raise your Zestimate too.
Bottom line -- if you really want to know what price would hit home with buyers, it's best to talk with a real estate agent.