If you’ve ever looked up your home on Zillow, you’ve probably checked out the Zestimate. It’s quick, it’s free, and it gives you a number that seems like it should be close to reality. But many homeowners are surprised when their Zestimate is tens of thousands of dollars lower—or higher—than what their home is actually worth.
So why does this happen? Let’s break it down.
How Zillow Calculates a Zestimate
Zillow uses an automated valuation model (AVM). This means the system pulls in publicly available data and compares it to recent sales in your area. It looks at details like:
- Square footage
- Number of bedrooms and bathrooms
- Lot size
- Location within a ZIP code
It then runs those numbers through an algorithm to estimate value. On the surface, it sounds solid—but there are big limitations.
Why Zillow Estimates Often Miss the Mark
The issue isn’t that Zillow is trying to mislead you. It’s that real estate is hyper-local, and algorithms can’t see the whole picture.
Here’s where Zestimates fall short:
- Condition of the home – Zillow doesn’t know if you’ve upgraded the kitchen or if your roof is 20 years old.
- Renovations and design choices – A remodeled bathroom or custom-built outdoor living space can add significant value, but algorithms can’t properly account for it.
- Neighborhood nuances – Two homes in the same ZIP code can vary drastically in value based on the street, school district, or even which side of the block they sit on.
- Market trends – Zillow updates its data, but it can lag behind real-time shifts in buyer demand and interest rates.
According to Zillow itself, its median error rate for on-market homes is about 2.4%, and for off-market homes it’s around 7.5%. On a $1,000,000 home in Los Angeles, that difference could mean an error of $75,000 or more.
Why Your Real Home Value Could Be Higher
If your Zestimate seems low, don’t panic—it doesn’t mean buyers will see your home that way. In many cases, the real market value is higher because:
- You’ve invested in upgrades buyers are willing to pay for.
- Your home sits in a highly desirable pocket of the neighborhood.
- Inventory in your area is low, driving competition.
You’re in a market like Los Angeles, where lifestyle factors (views, architecture, proximity to dining or the beach) play a huge role in pricing.
The Difference Between Online Estimates and Local Expertise
Think of a Zestimate as a starting point, not the final word. Online tools can give you a general range, but only a real estate professional who knows your neighborhood can give you a true picture of value.
At Uniquely Real Estate, we combine:
- Local sales data that Zillow doesn’t catch immediately.
- On-the-ground knowledge of what buyers in Los Angeles are looking for right now.
- Experience with luxury markets where unique features can swing value significantly.
This approach ensures you’re pricing your home strategically—not leaving money on the table or scaring off buyers with the wrong number.
So, Should You Trust Zillow?
Use it as a quick reference, but don’t rely on it when making real decisions. A Zestimate can’t walk through your home, see the quality of your finishes, or understand why your particular street is more valuable than one a few blocks away.
For something as important as selling your home, it’s always better to get a professional evaluation.
Zillow is a helpful tool, but it’s not a crystal ball. Home values are influenced by dozens of factors that an algorithm simply can’t see. That’s why homeowners who rely on Zestimates alone often end up confused—or worse, underpricing their property.
If you’re curious about your home’s true value, don’t leave it up to a formula. Get insight from local experts who know Los Angeles neighborhoods inside and out.
Contact Uniquely Real Estate today for a free, no-obligation consultation. We’ll give you a clear, accurate picture of what your home is worth—and how to position it for the best results in today’s market.
