Spring 2014, Vol. 39, No. 1

Abstract: This article compares Zillow.com’s home estimate values (Zestimates) with actual sale prices of 2,005 single-family residential properties in two markets in November 2013. A Zillow “four-star” market in suburban St. Paul, Minnesota, and a Zillow “one-star” market in suburban St. Louis, Missouri, are analyzed in terms of Zestimate accuracy between these two markets, as well as within specific price ranges. In aggregate, for both markets and within all prices ranges, the mean difference between Zestimates and sale prices is 24.8 percent. Comparing the two markets, Zestimate accuracy is significantly better in the four-star market as compared with the one-star market, with a mean difference between Zestimates and sales prices of 17.15 percent and 30.48 percent, respectively. However, with the possible exception of the middle market price range, $203,000– $253,000, differences between Zestimates and sale prices are so great as to render doubt about the usefulness of Zestimates, regardless of the market’s star rating. Differences usually are overestimates, with subsequent sale prices below Zestimate values.