Zillow has introduced the Zestimate forecast, a consumer-focused predictive tool to estimate the future value of individual homes.
The Zestimate forecast predicts the estimated change in a home's value over the next 12 months in both dollars and percentages. For example, if a home at 123 Main St. has a current Zestimate of $200,000, the Zestimate forecast for that home in one year might be $210,000, which means Zillow is predicting that home's value will increase by 5 percent. This new feature helps consumers and real estate professionals better understand how local housing trends can affect the future value of specific properties. The forecast also adds another layer of information to Zillow's living database of all homes, which includes rich data, Zestimates and Rent Zestimates on more than 100 million homes nationwide.
"When Zillow first launched its Zestimate home valuation in 2006, we introduced an important layer of transparency to the real estate market to empower consumers to make better decisions. Today, Zillow lets you see historical Zestimates over the past 10 years, and now the new Zestimate forecast provides a unique glimpse into the future never before possible at the home level, "said Zillow Chief Economist Dr. Stan Humphries, who created the proprietary Zestimate algorithm. "There are many very important reasons to choose to buy or sell a home, and this new tool helps shed light on one of those considerations."
To calculate the Zestimate forecast, Zillow uses information on the individual characteristics of each home, including the number of bedrooms, bathrooms and square footage. More than 47 million U.S. homes have had their homes facts updated by homeowners or real estate professionals, making Zillow's national database of home facts significantly more accurate than most public records. This individual home information is then combined with a variety of local economic and housing data that might impact future home values in a region. Data includes the supply of homes for sale, percentage of delinquent loans, population growth, income growth and local unemployment rates. Zestimate forecasts are updated monthly to reflect changing local economic conditions and homes that are updated and improved upon. Homeowners are encouraged to claim their homes on Zillow and keep all home facts up to date in order to ensure the most accurate forecast possible.
Zillow first introduced forecasting in 2011, enabling consumers to see where home values are headed over the next 12 months at the metro, county, city and neighborhood level. Home-level Zestimate forecasts are now available for more than 50 million U.S. homes, with plans to eventually expand coverage to all homes for which Zillow has real estate data and Zestimates.