Why Is My Home Value Dropping on Zillow? 6 Reasons Why

Clever Real Estate

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Clever Real Estate

August 25th, 2022
Updated August 25th, 2022

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Algorithm change | Home listed for sale | Missing facts | Listing price | Neighboring homes | Market shift | How do I get an accurate estimate? | FAQs

Whether you're getting ready to sell your home or just curious about your home's value, you may have noticed that your home's estimated worth on Zillow fluctuates over time. This can happen for many different reasons that may or may not reflect your home's actual market value — such as a change in Zillow's algorithm, missing or faulty data, or shifts in the market.

The best way to figure out your home's true fair market value is to get a comparative market analysis (CMA) from a professional realtor in your area. Get a free home valuation from a top realtor near you today!

But if you're just looking for a ballpark idea of your home's worth, we recommend checking multiple online home value estimators. This will help you rule out any sites that are relying on outdated or faulty information — and give you a better idea of your home's current value.

Home Value Estimator

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6 reasons your Zillow estimate may have dropped

1. The Zillow algorithm changed

Zillow values homes based on an algorithm. When the algorithm changes, your estimate will likely change too. Zillow changes its algorithm frequently, with consistent small updates and occasional major updates.

Also, the algorithm refreshes every day to use the latest data, which may contribute to the difference in value you see each time you check your Zestimate.

The best way to get an accurate home value estimate is to speak with a professional real estate agent. An experienced realtor will do an in-depth analysis to determine your home's current market value.

💰 Find out how much your home is really worth!

Connect with the best agents from top brokerages in your area, and receive a free home valuation! In addition, when you list with Clever you'll also get:

  • A discounted listing fee of just 1% with top local agents

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2. You listed the home for sale

When you list the home for sale, Zillow starts using listing data in its algorithm to estimate your home value. Listing data isn’t available for off-market homes, which is why this data affects your estimate only after you list the home for sale.

3. Zillow is missing some facts about your house

If Zillow doesn’t have all the information about your home, your home value estimate might be lower than it should be. You can try to improve your estimate by taking these steps:

  • Accurately describe the features of your home
  • Check off all the amenities in your Zillow profile
  • Report any updates, like additions or remodels, to a tax assessor (Zillow can’t evaluate unreported updates)

4. You set a list price

When you set a listing price for your home, you may see a change in your Zillow estimate. And if you raise or lower that listing price, the estimate may adjust again.

Previously, Zillow has said that its Zestimates are independent of list price[1] because it wants to track the market, not drive it. However, Zillow’s algorithm sometimes considers the list price as a valuable signal, particularly when other data isn’t available, and adjusts the Zestimate accordingly.

5. Home sales in your area are affecting the data

Zillow relies on data from neighboring homes to calculate your home value. If homes in your area are selling for under market value, that will affect your estimated home value.

Zillow’s algorithm creates your estimate in part by pulling your home’s square footage from tax records, then pulling data from recent home sales in your area. This apples-to-apples comparison doesn’t consider factors like building materials, home style, improvements, and higher-end appliances that can increase your home value.

» MORE: How Does Your Neighborhood Affect Your Home's Value?

6. The market shifted

Zillow may adjust your home value estimate according to the market. In general, homes are worth more during a seller’s market than during a buyer’s market. If you checked your Zestimate during a hot seller’s market, then checked it again when the market turned cool, your home value may have taken a hit.

Keep in mind: Your Zestimate isn’t always accurate, and your home value depends on your unique local market conditions.

» LEARN: How to Tell If It's a Buyer's or Seller's Market in Your Area

Get an accurate home value estimate with Clever

If you’re worried about a Zestimate drop and want a more precise estimate of your home’s value, your best resource is to talk to a local real estate agent.

An experienced local agent will perform a comparative market analysis (CMA), which is the most accurate way to determine your home's current market value. Get a free CMA from a top realtor in your area now!

👋 Get a free CMA from a top local agent!

Before putting your home on the market, it's important to know your home's true value. Our licensed concierge team will connect you with top-rated realtors to perform a free professional CMA on your property — from a trusted brand like Keller Williams and RE/MAX.

Compare top local realtors until you find the perfect fit, then pay just 1% in listing fees when you sell your home. Or walk away at any time with no obligation. Find a top local agent today!

FAQs

While Zillow continually updates its algorithm to try to improve accuracy, Zillow’s estimate of your home value isn't definitive. You can get a more accurate estimate by working with a local real estate agent who can complete a comparative market analysis.

If your Zestimate is off, it might be because Zillow is missing some information about your house. Fill in the gaps by accurately describing the features of your house, checking off all of your home’s amenities in your profile, and reporting any updates to a tax assessor.

Zillow, Trulia, and Redfin are generally considered the most accurate sites for home values. But just because they're the most accurate home value websites doesn’t mean their estimates are reliable. Learn more about the best home value websites.

Related links

ARTICLE SOURCES
[1]

Wiggen, Teke. "Zestimate vs. Redfin Estimate: Are home valuations that use list prices, er, useful?." Accessed August 5, 2022. Updated February 02, 2017.

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