How reliable is Zillow Zestimate?

Zillow is a real estate website that has great mapping features and also shows available for sale. Not only that, it also gives sales figures for recently sold homes which is the one aspect of the site that sets it apart from the other home search websites. However, there is one function of it which I find really pretty useless when it comes to coming up with estimated values of homes based on sales data, which is a feature they call a Zestimate. One reason for this is that it does not take into account a specific subdivision or other important variables when determining value. It also has values that swing wildly from low to high values when certain markets, like ours, are more balanced. This is because it takes into account sales that might be nearby, but also located in much higher or lower priced subdivisions. Take for example the following.

In Chadwick Place and Chadwick Estates subdivisions, located in the northern part of Peoria, in the Dunlap School District. I pulled the sold information for all of the homes in the two subdivisions (12 sales) that have closed so far this year. The TRUE average sold price was $451,333 for those 12 homes. The average value as estimated by Zillow for these 12 homes was more than $45,000 off.

Specifically...

7203 Draycott...sold for $355,000, Zestimate was $317,200...off by $37,800

7204 Vauxhall...sold for $366,500, Zestimate was $314,100...off by $52,400

70014 Clayton...sold for $375,000, Zestimate was $338,700...off by $36,300

5919 Ivybridge...sold for $390,000, Zestimate was $318,800..off by $8,200

6815 Greenwhich...sold for $395,000, Zestimate was $358,000...off by $37,000

7114 Vauxhall...sold for $400,000, Zestimate was $361,600...off by $38,400

5905 Eaglecreek...sold for $411,000, Zestimate was $361,700...off by $49,400

5811 Eaglecreek...sold for $458,000, Zesitmate was $415,000...off by $43,000

6812 Stonecrest...sold for $560,000, Zestimate was $496,000...off by $64,000

5811 Ivybridge...sold for $507,500, Zestimate was $500,400...off by $7,100

7012 Stratton...sold for $580,000, Zestimate was $464,000...off by $116,000

7021 Stratton...sold for $618,000, Zestimate was $562,300...off by $55,700

So while Zillow does a wonderful job with their mapping features, available homes and sold prices, it does a horrible job with its Zestimate values and current market value indicators. Thanks for reading!

Sincerely,

Mark and Jennifer