Zillow Zestimates pretty good to way off in Chicago

I received an email from Zillow.com this morning with a link to their Chicago home values. A nice looking chart of Zillow’s Home Value Index for Chicago appeared. Zillow defines the index as the mid-point of Zestimate valuations for Chicago. Half the Zestimates are above this number and half are below it.

A Zestimate is Zillow’s estimated market value, computed using a proprietary formula. I’ve written in the past about how I’ve found many Zestimates to be significantly incorrect. So I checked Zillow’s Zestimates for a few home sales I’ve recently been involved in. The results ranged from pretty good to way off the mark.

Zillow’s Zestimate for 7612 N Rogers #2 is $339,000. My listing just closed yesterday for $334,000 so Zillow’s Zestimate was off by less than 2%. Pretty good!

Zillow’s Zestimate for 516 W Oakdale 4E is $505,500. My buyer closed on the sale this morning for $569,000 so Zillow was off more than 11%. Anyone familiar with 3 bedroom 2 bath Lakeview condos will tell you that one on the top floor with a private rooftop deck in a elevator building is worth far more than $505,500! Not so good!

Zillow’s Zestimate for 3053 N Lakewood is $643,500. My buyers bought it in March for $572,000 so Zillow was off again more than 11%. Not so good!

Zillow’s Zestimate for a River North condo some buyers of mine are considering is less than $1.3M. Priced around $2M, I think it’s a bit overpriced, but not by 65%! Way off!

So when you look at those colorful Zillow Home Value Index Charts, keep in mind that they are based on Zestimates which can be pretty good to way off.

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ABOUT THE AUTHOR

Fran Bailey Fran Bailey is a Realtor who has been quoted in numerous Chicago and national publications. To schedule showings for any listings, get a free market analysis for your home or to contact Fran email her at fran.bailey@bairdwarner.com or call 773.793.4516. Learn More

Comments

  1. Johan S. says

    Thank you for these helpful examples! Based on your examples it appears that the higher the price the more inaccurate the zestimate. Do you think that’s the case?

  2. says

    Hi Johan,

    You’re welcome! I can see how you would get that impression. I don’t know if that’s the case, as I haven’t tracked enough Zestimates. I would expect a formula to do a better job of predicting “cookie-cutter” home values than higher end properties with more variables affecting values. You could be right!

  3. says

    Hey Fran – You are right that Zestimates can be all over the board, we’ve obviously never been inside the home and we all know how unique one Chicago city home can compared to the next. Good thing there are experts like you to guide people through the process once they are serious to start the buying or selling process.

    One thing we did add to the Zestimate about a month ago was the ability for the home owner or the listing agent to actually pubically comment on the Zestimate. You can say right on the Zestimate whether you think it is too high, low or just right and comment for all viewers to see.

    Sara from Zillow

  4. says

    Hi Sara,

    Thanks for the update on your new feature allowing owners to comment on their Zestimates! Any statistics or just a sense of who is taking advantage of this feature? I would guess that owners are more likely to comment, if they think their Zestimate is too low. Has anyone actually commented that their Zestimate is too high?

  5. says

    I think it is too early to give you any good stats, this really just launched and we haven’t proactively marketed it. Right now we have about a 100 or so comments, and they are mix of both home owners and agents.

    I definitely think there would be people that comment the Zestimate is too high! For example, I was in Detroit today, and we do tend to run high there because we don’t consider foreclosed properties in the Zestimate formula, so that is a chunk of inventory that isn’t accounted for.

    Good question though, something that will be interesting to watch. I’ll have to see if I can get some better data for you when more people have used it.

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