Why You Can't Just Trust Zillow: Part 172

Recently I wrote an article for BiggerPockets criticizing Zillow's Zestimate feature and noting it probably relied too much on the list price for listed properties; which is why it's Zestimate is usually pretty good for such properties whereas not so good for unlisted properties. I compared 12 appraisals we had to their Zestimate and found,

Overall, there’s quite a range with the Zestimate, including half being over 10 percent off the appraisal and two being over 20 percent.
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Therefore, I think it’s fair to say that Zestimates are not that great when it comes to off-market properties and are probably, at least in part, only so accurate on listed properties because the list price is also accounted for. In that way, they are riding off of the work of real estate agents, investors, and homeowners, who valued the properties themselves before listing them.

I can think of no better example of this than a recent property I looked at. It was bought in August for $193,000 and then relisted in October (with what looked like nothing more than paint and carpet) for $325,000. Here's what the Zestimate did:

Yes, the Zestimate is a good place to start. But don't ever take it to the bank!