While Zillow may be a place to start when determining a home’s value (called a Zestimate) it is not a good place to end! Consider their own most recent statistics from June 15, 2011 for the San Francisco Bay Area:
* Their median error on all Bay Area home appraisals is 7.2%. That’s almost $40,000 off on a $500,000 home
* Two-thirds of their home appraisals in the Bay Area are off by more than 10%
* One-fifth of all “Zestimates” are off by a whopping 20%
By simply averaging large amounts of Tax Roll data, Zillow cannot get the full picture. It misses nuances like neighborhood, street location, school district and any amenities added to a home (i.e. remodeled kitchen, new deck, pool, windows, baths, or floors.)
While it amy be a fun little tool, Zillow and other automated home appraisal sites simply lack the human touch to bring much credibility to the table.