How Accurate Is a Zillow Estimate? Real-Life Insights for Home Buyers and Sellers

• by Corbin Fairweather
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Picture this. You’re sitting with your phone over morning coffee, scrolling through homes you can barely afford but can’t help dreaming about. There it is—the price that makes your jaw drop, in blue: the Zestimate. Millions use Zillow every day, swayed by that instant number like it’s gospel. But what if I told you it’s not always that simple? Sometimes, trusting an online estimate to decide your next move could cost (or save) tens of thousands. There’s way more behind that number than most people realize, and if you’re buying, selling, or just curious about your home’s value, you need to see what’s under the hood.

What Is a Zillow Estimate—and How Does It Work?

Zillow launched the Zestimate back in 2006. According to Zillow’s own FAQ, “The Zestimate home valuation is Zillow’s estimated market value for a home, computed using a proprietary formula.” But what’s behind that proprietary black box? Algorithms. Lots of them, chewing through mountains of data points—over a hundred million across the US, at last count. The Zestimate pools info like recent sales, tax records, price history, square footage, number of bedrooms and bathrooms, features like pools or garages, and even the age of the roof in some cases. It runs all this data through its models and spits out what it thinks a home should be worth if sold today.

The catch? The Zestimate is only as good as its inputs. In areas where public records are frequent and up-to-date, Zestimates get pretty close, sometimes nailing the sale price within a few thousand dollars. But if your local council hasn’t updated their data in a decade, or a neighbour adds a full wing and doesn’t report it, the estimate slides off the rails. Zillow updates its Zestimates multiple times a week, sometimes daily in hot markets, but when key data is missing—or just plain wrong—that number on your screen can get wild.

Back in 2016, Zillow crunched some numbers and found their Zestimate median error was 4.3%. By 2022, Zillow claimed a national median error rate for on-market homes was under 2%, while for off-market homes, it hovered around 7%. This means if a home was worth $1 million, the Zestimate could be off by $20,000 (on-market) or $70,000 (off-market) right out of the gate. Not exactly pocket change. What’s more, error rates aren’t evenly spread. In places where homes are mostly identical—think new suburban developments—Zillows’ algorithms gobble up the data and have a field day getting close to the mark. But older neighbourhoods in Auckland, where no two houses are quite the same? Zestimates can look like a dartboard after a blindfolded round.

It’s not just about errors, either. New listings or renovations that haven’t been logged yet? Zestimates will lag. If a crazy bidding war skews recent comps, the number could jump or dip unexpectedly. That’s why if you check your property’s Zestimate today, then again after your neighbour flips their place for $400,000 over asking, you might see a sudden spike or dip that feels totally random.

It’s also worth noting: Zillow can only work with what’s public. Some key features—like high-end finishes, views, or unique architectural details—aren’t part of the dataset unless someone plugs them in manually. In hyper-local areas, where homes have unique quirks, or where the market is volatile, this limits how close the Zestimate gets to reality.

The Good, the Bad, and the Surprising Truth About Zestimate Accuracy

So, is the Zestimate trustworthy? Well, it depends on what you’re using it for. Let’s talk positives first. If you’re just browsing homes, the Zestimate is a solid tool for getting a ballpark sense of local prices—especially in cities where properties move fast and data is rich. Great if you’re sizing up neighbourhoods or deciding when to jump, because you’ll see price trends right away. For newer homes or cookie-cutter properties, Zestimates approach what local agents say and often line up pretty closely with eventual sales prices.

But what if you’re banking on Zestimate to price your home before selling, or to make an offer? That’s where mistrust sneaks in. Real estate agents love to joke about sellers obsessed with their Zestimate—some even try to use it as leverage against the agent’s suggested list price. In reality, the market doesn’t care about a number spat out by an algorithm. Buyers will compare to similar homes, what’s sold recently, and actual condition during viewings. That’s why top realtors always say, "An algorithm can’t smell your new carpet or hear the planes flying overhead."

David Gelfand, a real estate broker with Compass, told The New York Times:

“Zestimates often give sellers a false sense of security—or disappointment. Only boots-on-the-ground agents, with their eyes on every sale in the neighbourhood, can really know the pulse.”

Zillow doesn’t shy away from this criticism. In fact, it warns on its own website: “The Zestimate is not an appraisal and you should not use it in place of an appraisal.” The company recommends talking to a real estate pro both before listing your home or making an offer, because algorithms just can’t nail the tiny details that can tip prices one way or another. Even in tech-heavy markets, seasoned agents outperform bots when things get weird. Like, say, a hidden ocean view blocked by a tree, or if the local school gets a new principal and suddenly all the families want to move out.

Sometimes, the Zestimate will chase prices up or down, reflecting market movements. If the market suddenly takes off or plummets, you might see crazy swings—sometimes before agents even catch on. Last year, a family in Wellington saw their Zestimate drop $120,000 in a week because of wild sales swings nearby (even though nothing about their house had changed). That’s the downside of real-time data: it can be both too fast and not nearly nuanced enough to reflect what truly matters to buyers or sellers.

One often overlooked issue: People who update their home’s details on Zillow—say, by correctly adding a bathroom or noting a finished basement—can see big swings in their Zestimate. If no one does this, the algorithm’s stuck on outdated info. Tip: Log in and update your home’s specifics for a closer estimate. It’s one way to nudge the algorithm toward accuracy. But even then, don’t mistake a Zestimate (or similar tools from CoreLogic or Homes.co.nz for us in NZ) for gospel truth.

How to Really Find Out What Your Home Is Worth

If you want a truly accurate picture—that number you can comfortably take to the bank, or base a major financial decision on—you’ll need more than just a Zestimate. So what’s the best way to go about it? Here’s a rundown that works, no matter if you’re buying your first place or cashing out of your family home.

• Talk to a Local Agent: Not all agents are created equal, but a pro with years of experience in your suburb will know how each feature, view, or quirk adds to (or subtracts from) value. They can also tell you what buyers are looking for right now, not last year. Real people beat robots in any market, but especially when conditions get weird.
• Get a Professional Appraisal: If you’re refinancing, buying, or need the most accurate number, an appraisal checks all the boxes. Appraisers walk through your home, compare recent sales, factor in upgrades or problems, and crunch everything into an official value. Lenders will always use this step—algorithms just aren’t good enough for big money.
• Dig Into Recent Sales: Don’t just look at listing prices. What did homes actually sell for on your block in the past three to six months? Are they similar in style, size, and condition? That’s what buyers and sellers use, and it’s why agents’ market analysis is often dead-on compared to any online estimate.
• Update Your Home Info Online: It sounds obvious, but tons of homeowners never bother. If your Zillow (or NZ equivalent) page is out of date, fix it. Honest info—like an added ensuite or upgrades—make the algorithms less likely to embarrass you with a wildly wrong number.
• Factor in Market Momentum and Timing: Property prices swing for odd reasons. Maybe an entire street renovates, markets shift, or bad news hits an area. Automated estimates chase these changes, sometimes lagging or overreacting. Human eyes see it faster and in context.
• Remember Your Home Is Unique: The algorithm can’t scope your views, your secret sun-trap garden, or how your house feels at sunset. These things matter, and a good agent will factor them in. If you’re selling, highlight what makes your home truly stand out.

Next time you see a Zestimate or any automated home value, use it as a starting point—a way to open up the conversation, not close it. Ask your agent why a number might be off. Figure out if the local market’s going wild that week. Don’t hang your financial future on one number pumped out by a code running on some server a thousand miles away. Bottom line? Zestimates are like weather forecasts: often close, sometimes way off, and always better when backed up by a good local expert. So take that number, dig a bit deeper, and trust your gut—or at least someone with a pair of boots on your street.