When you go into Zillow you can click on a property and see the prediction for how much Zillow predicts that zip code will increase in the next year.

Just curious as to whether anyone has documented and tested their "predictions" to see how accurate they are?

My area is showing a next year increase of over 10 percent, which seems incredibly high, particularly after the big run-up of the past five years or so...

Your thoughts and observations...or have you found a better predictor???

Zillow makes its predictions based not only on your local market, but also on markets it perceives a similar to yours. Unfortunately, it organizes by zip code, and the variation among neighborhoods in Zip codes are too broad to draw any accurate prediction of neighborhood A vs. B. I haven't spent enough time tracking data to know how close they are. I just know their "Zestimates" are often way off. For new people moving in to the area, you can get a very high-level analysis (i.e. is this a $200,000 neighborhood vs. a $300,000 neighborhood?), but when you get down to the specifics you still have to do your homework.

I am also skeptical of Zillow's predictions. And I agree with Sid on the better estimate of rental rates than home values and predictions.

There's a house in my town that's catty-wonkus and a good storm away from falling down. It's been vacant for the last three, four, five years. The guy had tried selling it, but ended up going to jail--- and then his family said he had decided against selling it, because he wanted a place to go back to when he got out of jail. But of course, no one paid the taxes in his absence, so it got struck off to the City last fall. Maybe October, maybe November. I wasn't interested in it by that point--- because it had such major structural issues that it's not standing up straight.

The City has ambitiously set the price at a little above $7k, although I doubt that was what the original bid on the steps was set at--- the taxes due is only about $1k, plus legal fees and penalties and stuff. According to the appraisal district, the house is worth about $5k and the dirt is worth about $2k.

Anyhow, Zillow shows that to be (a) an active foreclosure, and (b) prices the foreclosure at $21k and (c) sets is Zestimate at $28k+. The picture they use is straight out of GoogleMaps, from January of 2013. It was still pretty shabby and decrepit, but at least it was standing up straight.

Anyone who bought it sight-unseen based on Zillow's photograph would be in for a nasty shock.

Anyone who bought it sight-unseen based on Zillow's information (price + photo) would deserve what they got.

Catty-corner to that particular house is one that I own.

Back in 2017, I was looking up Zillow properties in my area. It had that rental listed as a potentially available house being in foreclosure. I signed up for a free account just to look at the details... it was talking about 2013, when it was taken by the City for back taxes.

It said it was worth $50k, was 1500 sf, and would rent for $1100/month. We bought it for $8k in 2015; it's 1100 sf; and it rents for $430/mo.

In 2013, which is as far back as my appraisal records online go, the house was assessed at $14,000. ($11,000 for the house, $3,000 for the lot.) Considering the condition that the house was in--- yeah. We bought it, acquired a lot of anecdotes along the way, and got it renovated. (Note the sequence of events...) Now, it's appraised at $10k. (We successfully challenged the taxes when we bought it, got it reduced to $11k, and for some reason, the City lowered the taxes a smidge more two consecutive years.)

So, even though Zillow does not take into account the difference between Decrepit Heap and Clean/Safe/Functional, I have no clue how it came up with the data that it based that $50k on, let alone the $1,100.

Zillow has their motives on everything they do.

This is semi-OT to the post, but Zillow has several useful features beyond just rents and Zestimates.

1) Occasionally, it shows the actual sale price of the property. Some of the yellow "Sold" dots show the actual price and date, which is helpful for getting comps.

2) I like that they track listing price history, if known. Helps me negotiate knowing when Sellers are getting motivated.

Zillow should be off the mark for a great many years until it becomes the go to source for info.

They want your attention so they will add features until they have it.

Inevitable, they gather info and with enough info they will begin to be very accurate.