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Zillow Zestimate NOT accurate in Austin, Texas

How accurate is a Zillow Zestimate in Austin, TX? That is one of the most common questions I am asked about Austin real estate. Let’s take a look at what a Zestimate is, what their limitations are in Texas and how accurate Zillow says their Zestimates are in Texas. What is a Zillow Zestimate?

What is a Zillow Zestimate?

A Zestimate is a computer generated estimate of market value. On their website Zillow makes it clear it is not an appraisal, they don’t see the home, don’t know about any upgrades and there is no ability for a human to manually alter the Zestimate for a specific property.

Zillow says it should be a starting point in determining a home’s value. On their website they recommend buyers and sellers get a market analysis from Austin real estate agent like myself to determine a more accurate value. What is different about a Zestimate in Texas?

Zillow says there accuracy depends on the home data they receive. The difficulty Zillow has in Texas is home sales prices are not public record here like they are in most states. In Texas Zillow is primarily relying on tax values to establish a Zestimate. Tax values aren’t particularly accurate to begin with plus they can be up to a year old. Most of Austin and the surrounding areas have seen median price increases over 10% from a year ago. How accurate does Zillow think Zestimates are in Austin, Texas?

How accurate does Zillow think Zestimates are in Austin, Texas?

Zillow

On their website Zillow provides this accuracy table. Overall, the whole state of Texas scores 1 out of 4 stars, the lowest score possible. Unfortunately Zillow doesn’t rank Austin, the only city they break out the figures for in Texas is Dallas. I don’t think it’s coincidence that of all the cities Zillow provides accuracy for Dallas is the lest accurate. It’s likely due to sales information not being public information in Texas.

Although Zillow doesn’t provide information for Austin let’s take the figures for Dallas and see what they would mean for you in Austin. Zillow estimates that almost 60% of their Zestimates are off by more than 10%. The average sales price in Austin is about $300,000. 10% off either way would mean if a home in Austin has a true market value of $300,000 there is almost a 60% chance he Zestimate will be either under $270,000 or over $330,00.

If you are are relying on a Zestimate as seller you are likely to be either selling too low and leaving money on the table or listing too high and not receiving an offer. As a buyer you likely to pay too much for a home or become frustrated because you are making offers that are too low and losing out on a home to someone who is working with a REALTOR to help determine a more appropriate offer. Zillow recommends getting a market analysis from a local REALTOR

Zillow recommends getting a market analysis from a local REALTOR

Do you think the figures Zillow provides are accurate? If you want to do what Zillow suggests and get a more accurate market analysis of your home’s value from an Austin REALTOR please call me at 512-656-5627

July 22, 2013 by Eric Peterson

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