As realtors, we come up against the Zillow “Zestimate” every day. It’s nice to see that in a recent interview the CEO of Zillow, Spencer Rascoff, concedes that the Zestimate uses an algorithm that doesn’t work across the board. He admits that the Zestimate should only be used as a starting point for buyers and sellers to consider when evaluating a price for their home. In fact, he answered that the nationwide Zestimates have a “median error rate” of about 8%.
Eight percent is a huge number in some markets, including Ridgefield and the rest of Fairfield County. In fact, for a median priced home of $650,000 in Ridgefield – that translates to a difference of $52,000! You can see why buyers and sellers bring the Zestimate to our attention when it’s incorrect.
Given that real estate markets are local in nature, the Zestimate is not a replacement for consulting a licensed real estate professional. Realtors take into account many things when placing a value on a home. Location, condition, size, finishes, acreage, current market fluctuations, and many other factors go into the “formula” for correctly pricing a home to sell. Just some food for thought.
Read the whole article published in the LA Times here.