In many cities across the US, Zillow has reasonably good property-value estimates, called Zestimates. In San Francisco, however, they rank themselves two stars out of four in accuracy, with a median error rate of 4.9%. Here in the East Bay, the algorithms are similarly challenged.

 

In late January, we looked up the Zestimates of all our pending escrows. This is the second year we have done this analysis, and for the second time, we found many inaccuracies. Of our 15 pending escrows, five of the homes sold for less than their Zestimates by between 2-6%. Ten homes sold over their Zestimate from between 3-30% over the estimated value, with an average of 15% percent off. (Redfin’s estimates can also be quite inaccurate. One of our agents reported that their own home in Berkeley ranged in Redfin’s estimated value from $1,500,000 to $2,400,000, depending on the week.)

 

How can the algorithms be so far off? With low inventory, few comps, a rapidly changing market, and an older housing stock filled with a wide range of remodeling, it’s a wonder the algorithms work as well as they do. Granted, a realtor estimate is not always 100% accurate either, but a good realtor will have been inside the homes of the comparable sales, and knows what the market is doing, what’s pending, how many offers each local sale has had, and how the home was staged and presented. Zillow has no way of knowing the emotional appeal a property will have to a potential buyer. Contact us for a market analysis based on seeing the inside and outside of your home, and we will happily discuss our estimate versus the latest guestimate.

 

We know that the human touch of an experienced local agent makes a huge difference in outcome for our clients.