How Accurate Is Zillow's Zestimate? (And What to Use Instead)

Zillow's Zestimate is the most famous home value tool in America. It's also the most misunderstood.

Let's break down what Zestimates actually are, how accurate they really get, and when to trust them—or not.

What Is a Zestimate?

A Zestimate is Zillow's automated estimate of a home's market value. It's calculated by an algorithm (Automated Valuation Model, or AVM) that analyzes:

• Tax assessments and property tax records
• Prior sale prices
• Location and lot characteristics
• Physical attributes (beds, baths, square footage)
• Market trends and comparable sales
• User-submitted data

Zillow generates Zestimates for over 100 million properties and updates them multiple times per week.

The Accuracy Numbers (Straight from Zillow)

Zillow publishes their own accuracy metrics. Here's what they claim as of 2024:

For On-Market Homes (Listed for Sale)

• Median error rate: 2.4%
• Meaning: Half of Zestimates are within 2.4% of the actual sale price

For a $500,000 home, 2.4% means within $12,000. That's pretty good.

For Off-Market Homes (Not Listed)

• Median error rate: 7.49%
• Meaning: Half of Zestimates are within 7.49% of what the home would sell for

For a $500,000 home, 7.49% means within $37,450. Less impressive.

The Other Half

Median error means half are better, half are worse. That worse half can be significantly off:

• 25% of off-market Zestimates are more than 10% off
• In some markets, errors of 20-30% aren't uncommon
• Outliers can be wildly wrong

Why On-Market Is More Accurate

When a home is listed, Zillow has fresh data:

• The actual asking price
• Days on market
• Professional photos (for feature verification)
• Any price changes
• Comparable recent sales

For off-market homes, Zillow is guessing based on older, less complete information.

Where Zestimates Go Wrong

1. Unique Properties

Zestimates work best for cookie-cutter homes. If your property is unusual, expect bigger errors:

• Custom construction
• Large lot sizes
• Unique architectural styles
• Historic homes
• Properties with significant acreage
• Homes with income-producing features

Algorithm needs comparable data. If there aren't similar sales, it's extrapolating.

2. Recent Renovations

You just spent $80,000 on a kitchen remodel. Zillow doesn't know. Its algorithm sees the same 1992 kitchen it saw before.

User updates help, but: Zillow lets you submit updates, but the impact is limited and delayed.

3. Rural Areas

Fewer transactions = less data = worse estimates. In rural areas with sparse sales history, Zestimates can be dramatically wrong.

4. Condition Issues

Zillow can't see:

• Foundation problems
• Deferred maintenance
• Termite damage
• Roof condition
• HVAC age
• Code violations

Two identical homes on paper might differ by $50,000 based on condition.

5. Hyperlocal Factors

The algorithm might miss:

• Busy street vs quiet cul-de-sac
• View (or lack thereof)
• Neighbor issues
• HOA problems
• Pending development nearby
• School boundary changes

6. Rapidly Changing Markets

In hot markets or downturns, Zestimates lag reality. They're based on closed sales, which reflect decisions made 30-60 days earlier.

Real-World Zestimate Errors

Scenario 1: Urban Condo

• Zestimate: $425,000
• Sale price: $418,000
• Error: 1.7%
• Result: Close enough

Scenario 2: Suburban Cookie-Cutter

• Zestimate: $515,000
• Sale price: $530,000
• Error: 2.8%
• Result: Reasonable

Scenario 3: Rural Property with Acreage

• Zestimate: $380,000
• Sale price: $475,000
• Error: 20%
• Result: Badly wrong

Scenario 4: Recently Renovated

• Zestimate: $550,000
• Sale price: $620,000
• Error: 11.3%
• Result: Missed the value add

How Zillow Compares to Other AVMs

Redfin's estimates are slightly more accurate in most markets—likely because they have access to MLS data that Zillow doesn't always get as quickly.

Recommendation: Check both. If they agree, you have confirmation. If they differ significantly, dig deeper.

When to Trust a Zestimate

✅ Good uses:

• Rough ballpark when starting research
• Tracking your home's value trend over time
• Quick sanity check on a listing price
• Comparing neighborhoods broadly
• Satisfying casual curiosity

When NOT to Trust a Zestimate

❌ Bad uses:

• Making an offer on a home
• Listing your home (get a CMA)
• Negotiating a divorce settlement (get an appraisal)
• Estate planning (get an appraisal)
• Challenging property taxes (get an appraisal)
• HELOC applications (lender will verify)

How to Get Better Accuracy

Step 1: Check Multiple AVMs

Look at:

• Zillow
• Redfin
• Realtor.com
• Chase Home Value Estimator
• Any lender tool you have access to

If four sources say $480,000-$510,000 and one says $420,000, you can discount the outlier.

Step 2: Update Your Zillow Profile

If Zillow's data is wrong, fix it:

1. Claim your home on Zillow
2. Update square footage, beds, baths
3. Note recent renovations
4. Add accurate photos
5. Correct any errors

This improves (but doesn't guarantee) accuracy.

Step 3: Look at the Comps Yourself

Zillow shows recently sold homes nearby. Click on 3-5 similar properties. Do they support the Zestimate?

If the comps are selling for $500,000 and your Zestimate is $550,000, be skeptical.

Step 4: Get a CMA

A Comparative Market Analysis from a local real estate agent is:

• Free (they want your business)
• Based on professional judgment
• Includes active listings (your competition)
• More nuanced than algorithms

This is your best free option for accuracy.

Step 5: Get an Appraisal

When money is really on the line, pay $400-$600 for a professional appraisal. It's the only opinion that matters to lenders, courts, and the IRS.

The Zestimate's Dirty Secret

Zillow has made billions partly by getting homeowners to obsess over their Zestimate. It drives traffic, engagement, and leads.

The business model:

1. Show you an exciting number
2. You visit Zillow frequently
3. Zillow sells ads and leads to agents
4. Agents pay Zillow for your attention

This doesn't make Zestimates useless. But understand the incentive: engagement matters more than precision.

Zillow's $500 Million Lesson

In 2021, Zillow shut down Zillow Offers (their iBuying program) after losing $500+ million.

What happened? They bought homes based partly on their own Zestimates, which overestimated values in a shifting market. When they couldn't resell profitably, they lost a fortune.

Lesson: Even Zillow can't predict home values accurately enough to bet the company on.

The Bottom Line

Zestimates are useful starting points, not final answers.

Rules of thumb:

• Within 5% of actual value: Possible for standard homes in active markets
• Within 10%: More realistic expectation for most properties
• 15%+ off: Common for unique, rural, or recently-changed properties

Use Zestimates for research. Use appraisals for decisions. And always, always verify with local data before making moves with your money.

---

Wondering what your home equity could unlock? Calculate your HELOC potential →