Our Zestimate obsession
Zillow's Price Estimates Are screwing Up Homebuying
Zillow's price estimates changed how we browse homes forever. Here's what's wrong with the Zestimate — and what every buyer and seller should know.
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The Lede
When Zillow debuted in 2006, the fledgling site bore little resemblance to the real-estate behemoth it is now. There were no options to find an agent, get a mortgage, or request a tour — the search portal couldn't even tell you which homes were actually for sale. There was, however, the Zestimate: a "free, unbiased valuation" for 40 million houses around the Us, based on a proprietary algorithm. Nowadays, the Zestimate is arguably the most popular — and polarizing — number in real estate.
Key Details
- About 104 million homes, or 71 percent of the Us housing stock, have a little dollar figure hovering above them on Zillow's website.
- The Zestimate is just one of a slew of automated valuation models that are increasingly used by banks, investors, and laypeople to estimate the value of homes.
- Just how accurate are those numbers, though? Until the house actually trades hands, it's impossible to say. Zillow's own explanation of the methodology, and its outcomes, can be misleading.
