zillow.com's home valuations, known as Zestimates, have come under fire in a study published in The Appraisal Journal's Winter 2010 issue.
The study analysed 2006 data for 2,045 properties in Arlington, Texas to conclude that zillow.com's estimates overvalue property by 10 percent compared to the sale price. The results go on to outline more discrepancies found between the 2006 data and zillow.com's Zestimates:
"zillow.com also overestimates values for approximately 80 percent of the houses in this sample by at least 1 percent; 0.88 percent of home values are underestimated by more than 10 percent, again compared to the sale price. If this were an automated appraisal district model used to estimate values for tax purpose, this would cause considerable concern."
zillow.com spokesperson Jill Simmons defended the website's data in an interview with inman.com.
"Regardless of the paper's conclusion, it's out of date and limited in scope," Simmons is quoted as saying. "What's important to our users is our accuracy today, not our accuracy from three years ago. To that end, zillow.com publishes updated accuracy for every county in the country several times a year, accessible on every page of the website, for consumers, professionals and researchers alike."