What Is a Zestimate?

Zillow’s “Zestimate” is an automated estimate of a home’s market value, calculated using public and user-submitted data, including recent sales, tax assessments, and property features. It is not an official appraisal and should be considered a starting point for understanding a home’s value, not a definitive figure.

How Accurate Is Zillow’s Zestimate?

Nationwide Median Error Rates

Home Type	Median Error Rate
On-market homes	1.94%
Off-market homes	7.06%

• On-market homes: The Zestimate is typically within 1.94% of the final sale price. For example, on a $500,000 home, the estimate might be off by about $9,700.
• Off-market homes: The error rate jumps to 7.06%, meaning the estimate could be off by over $70,000 on a $1 million property.

Market and Location Variability

• High-transaction areas (e.g., Colorado Springs, Phoenix): Zestimates are more accurate due to abundant data, with error rates as low as 1.2%.
• Low-data or unique properties (e.g., rural areas, luxury homes): Zestimates can be off by much more, sometimes missing the mark by six figures.

On-Market vs. Off-Market

• On-market homes: Zestimates are most accurate when the home is actively listed, as more up-to-date and detailed information is available.
• Off-market homes: Less reliable, especially if the property hasn’t sold recently or lacks updated details.

Why Zestimates Can Miss the Mark

• Lack of recent sales data: In areas with few comparable sales, accuracy drops.
• Unique features: Custom or luxury homes, or those with unique locations (e.g., mountain views), are harder to value accurately by algorithm.
• Unreported upgrades or condition: Zestimates can’t account for recent renovations or the current condition unless the information is updated in public records or by the homeowner.

How Does Zillow Compare to a Professional Appraisal?

• Zestimate: Automated, fast, and free—good for a ballpark figure.
• Appraisal: Performed by a licensed professional, considers home condition and local nuances, and is required by lenders for most sales or refinances. Much more accurate and tailored to the specific property.

Key Takeaways

• Zillow’s Zestimate is generally accurate for on-market homes in areas with lots of data, with a median error rate under 2%.
• For off-market or unique homes, the error rate is much higher, and the Zestimate should only be used as a rough guide.
• Always consult a local real estate agent or professional appraiser for the most accurate home value assessment.

Quick Reference Table

Scenario	Typical Accuracy
On-market, data-rich areas	Within 2% of sale price
Off-market, low-data/unique homes	Off by 7% or more