Why Does Zillow Hate My House?

Zillow is a fairly popular website among buyers. They have an algorithm they use to provide a Zestimate for any house, whether it’s actively for sale or not. The Zestimate is Zillow’s estimate of what they think the house is worth. This Zestimate is derived from recent comparable sales and a little fairy dust, I think.

I spend a lot of time debunking Zillow Zestimates. I will admit, it kind of pisses me off. I have to provide a buyer with comparable sales for any house they’re interested in, which is perfectly fine and expected as part of my job. But then I also have to go through an additional analysis of why Zillow is wrong with their Zestimate and why the buyer shouldn’t put much stock in that value. It’s hard to do this because Zillow doesn’t really tell you how they get their numbers, and who knows how much fairy dust is worth and figures into the calculation.

My own house is a perfect example of just how wrong Zestimates can be. Zillow started hating on my house in August 2012 and hasn’t given me a break since. In the real world, my house is probably worth around $350,000 given the condition it’s in and updates that have been done. Let’s take a look at Zillow’s data and see what they say, shall we?


In July 2012, Zillow said my house was worth $314,000. Today it is worth $209,738. Well, they really give a range, so Zillow says it’s worth somewhere between $145,000 and $294,000.

Is this some kind of joke? They’re saying my house is worth less than what foreclosures sell for in my neighborhood. And how exactly do they even come up with the value they’re stating if it’s lower than the lowest of sales in my neighborhood? This makes no sense at all. When I look at the Nearby Similar Sales they tout, they are all within 200 square feet of the size of my house and the lowest sale price is $314,900.

So what exactly have we done to warrant a Zestimate of more than $100,000 less than the lowest comparable sale? I do not know.

Zillow also hates many other houses in my neighborhood, including a house I have listed right now for $395,000. Zillow thinks it’s worth $268,389. The house went under contract in a week and I can tell you that it’s not selling anywhere near $268,389. If it’s any consolation, Zillow does feel that the value of this house increased by $41,971 in the last 30 days. Maybe we should have had the owners list it even higher? How does a house value increase by 18% in just 30 days? The other bizarre thing about this house is that it is very similar to my home, but Zillow uses completely different Nearby Similar Sales for my house and this one, even though it is located only .35 miles (4 city blocks) from my house.

Do you see why I’m confused? Where do these garbage Zestimates come from? And why do I have to keep debunking them?

What has been your experience with Zillow? Do you think it grossly underprices or overprices your home in their Zestimate?

14 thoughts on “Why Does Zillow Hate My House?

  1. I think their model might work better out in cookie-cutter suburban sprawl than it does in older, diverse, urban neighborhoods. Zillow hates my house too, but to be honest there are so few similar homes sold lately that it’s extremely difficult to understand how much my home is worth anyway. Not really an issue as I’m not planning to sell it.

  2. Josh, yes, I do find that Zillow is somewhat more in an acceptable range in the suburbs. The problem is that the West End has plenty of relevant sales data to use so the estimates should be much better.

  3. “The problem is that the West End has plenty of relevant sales data to use so the estimates should be much better.”

    Yes, I don’t get their estimates when houses are selling for much higher prices…

    It says our house is worth $232,000, but our neighbors house is only $190,000?

  4. Jay T. from Zillow here. We publish Zestimate accuracy tables so both real estate consumers and professionals such as yourself can fully understand that the Zestimate is an *estimate* of home value and isn’t intended to replace a pro’s opinion. That table for CT is here: http://www.zillow.com/howto/DataCoverageZestimateAccuracyCT.htm

    We also publish a page that details what is, and isn’t, included in the Zestimate (http://www.zillow.com/wikipages/What-is-a-Zestimate/). Agents have told us many times that armed with this information, conversations about the Zestimate are short and swift.

  5. Thanks for sharing the additional information, Jay. For those that don’t know, Jay works for Zillow now, but he had previously been a top real estate agent in the Pheonix area. So he understands the agent’s perspective.

    Armed with the language/disclaimers the site uses to describe the Zestimate, it should be easier to talk with buyers about how much faith they should put in that particular number when other data points are available. I appreciate you bringing that to our attention.

    Looking at the links you provided, it appears that the median error in Hartford County is 7.0%, which is given the highest accuracy rating of four stars. The error for our home is much higher, the Zestimate is about a 40% discount to what we believe the home is worth. Our “true” value does not even fall within the very wide Zestimate value range.

    Given these results, the question Amy posed as the headline still seems appropriate. Why does Zillow hate our house? Something has clearly upset the algorithm, since our error is so much more than the median for this area. To be fair, it seems like the whole neighborhood is out of whack, so it’s not really just our house.

    At some point it just seems like it might be a good idea to turn off the Zestimate for high-error locations until the engineers can figure out why they are deviating from real life by so much. Perhaps the algorithm could raise a red flag when the difference between a Zestimate and an MLS data point is more than 20% (or whatever percent you choose). And if there is a cluster of red flags like this, then that might be the time to investigate, and potentially even temporarily disable the Zestimate.

  6. Kyle – I’ll freely admit that I don’t understand all the nuances of the Zestimate algorithm. Occasionally there are areas that seem to react like what you’re describing. If you want to shoot me a property address, I’d be happy to get it to the… data nerds… that love to investigate these things. Rather than plaster your home address across the public Internet, you’re welcome to email me at JayT AT Zillow DOT com.

  7. Brooks, I sent the address of our Kenyon listing. The market has spoken as to the value of that home, so I figured it would be better than us asserting that our home was worth $350k or whatever. But I also told them that the whole West End looks wrong as I scan the Zestimates on a map, so hopefully they’ll identify an issue that was causing the algorithm to go haywire.

  8. You would think that if they were using recent sale prices, estimated wouldn’t be so low… perhaps being in a Hartford Zip code, brings you way down, but given their estimates of our homes value were considerably higher in the past, this too doesn’t quite make sense.

  9. Three comments: First, I agree Zillow is wrong about the West End. Amy and Kyle tell me if I’m wrong, but I hope my house is worth more than $190k.

    Second, I wonder what, if any, impact Hartford’s strange assessment ratio plays into Zillow estimates. Since Zillow relies upon public info, if it looks at the assessed value of a house in the West End and compares it to one in West Hartford, the impact would be considerable.

    Third, it’s interesting to me that Zillow appears to adjust its historical Zestimates. You’d think that, whatever it is, a Zestimate on any given date is not subject to historical revision, but I have a printout of my Zestimate from July 27, 2011 that shows historical values as high as $1mm. Of course, that’s absurd, but that’s what is said. Rewriting history just adds to the lack of credibility.

  10. I think your house is worth more than $190k, Mat.

    The split assessment ratio in the City could definitely contribute to the algotithm’s current error. As we all know, that is something unique to Hartford. And we also know that Zillow tries to pick up the assessed values when they are available. So that’s one avenue for Jay’s data nerds to explore.

  11. I sure hope Zillow is wrong about neighborhoods besides just the West End. Otherwise I paid nearly twice as much for my house in Southwest as Zillow now thinks it’s worth.

  12. Your area looks fishy too, EmGee. They have a lot of data points in Southwest, but there seems to be very little difference between the “value” of a foreclosed home and a non-foreclosed home.

    The Zestimates for non-distressed single-family properties in the area are well below MLS asking prices. And your Zestimate in particular is lower than the (already too low) numbers they assigned to listed properties. So the Zestimate is not going to be a reliable number for you either.

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