It’s not a huge mystery how these algorithms work... they’re basically just using price-per-sq-ft sales data for your location and multiplying it by the size of the property and perhaps tweaking it a bit based on number of bathrooms, amenities like swimming pool etc,
It’s a starting point but some of their numbers are crazy high and some are crazy low. The crazy high number is often for the crappy house in the nice neighborhood. Zillow/Redfin etc have no predictive mechanism for how well the current owners have maintained/remodeled/improved/damaged the place, and they assume that the dumpiest house on the block as just as good as all the rest. The crazy low number is typically seen for the improved placed that, due to remodeling, upgrades etc, is actually way better than the information available in public records would suggest
irishjuggler wrote: “It’s not a huge mystery how these algorithms work... they’re basically just using price-per-sq-ft sales data for your location and multiplying it by the size of the property and perhaps tweaking it a bit based on number of bathrooms, amenities like swimming pool etc,”
Essentially the same process used by professional home appraisors.
Zillow works best in large neighborhoods where a lot of houses are “cookie-cutter” and very similar.
In older or more rural neighborhoods with wide variations between houses the margin of error can get very high—particularly if public records are either inaccurate or not up to date.
My home’s Zillow and Refin estimates often vary by over $200,000. But Redin is always the lower estimate.