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Replies (3)
- Joe Balestriere, "Joebalestriere"
- Contributions:2
Good morning akobet, I was always skeptical of the ranges that Zillow estimates. From what I understand about Zestimates, is that they take into consideration only the fundamentals of the house, i.e. #beds, baths, square feet, etc. This type of analysis then gets a range based on a margin of error of maybe 10-15%. This type of analysis is unfortunately flawed in that some properties can be differentiated in price based on location and condition (and other important factors that are subjective) but much more than 10%. There has been much criticism over these Zestimates, maybe Zillow decided they wanted to be more accurate and increase the range to 50%. Hahaha, that way they can never be wrong! Call a Realtor in your area, they will be able to come up with a much more accurate estimate in a short period of time. It takes me to about 10 minutes to price a home, an hour to do it right. I need to see the home for the latter, but for the most part, the 10 minute market evaluation is generally spot on, but cannot be justified as accurately. Good luck! -Joe Balestriere William Raveis Real Estate
- wetdawgs
- Contributions:26833
I see variation in the relative size of the ranges depending on the amount of data for the home as well as the amount of data for sales of similar homes in the area. This is a pretty basic statistical concept, if I have 1000 points for calculation in a model it will have a much tighter range than if I have two. Indirectly you bring up a very important point. Many people focus on the Zestimate and never consider the Value Range. I personally think the two should be always presented and considered together.
Another issue that should be considered is what kind of distribution does one expect in that tolerance range? Uniform distribution? Unlikely. "Normal Distribution" (a bell-shaped curve)? Perhaps, but Zillow's "about Zestimates" link at the bottom of the page indicates the Kurtosis of the distribution is above 1, thus the peak is typically narrower than a "normal distribution". One also should look at the skewness of the distribution. Zillow doesn't publish that in the "about Zestimates", but the range as compared to the estimate value on the home details pages does imply the distribution is not symmetrical about the mean, and thus there is some skewness. Although several years ago, Zillow was using a narrower "range", it appears that it was perhaps one standard deviation of the mean, thus actual sales may have been falling outside the stated range occasionally. They seem to be showing more than one standard deviation now, but it has not been verified, and Zillow doesn't publish statistically what the range represents.
Is it me or did the Zestimate ranges get crazy wide in the last couple of months?
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