After using Zillow for years, consumers probably start to cozy up to the zestimates, just out of familiarity and convenience.
Those who are new to the game – and believe Zillow to be an authority – are going to think the zestimate is a neutral opinion of actual value. But the zestimate is simply based on the list price, and not some fancy algorithm.
Ryan at the sacramentoappraisalblog.com ran a post that showed how a zestimate fluctuated during the time the house was on the market.
The zestimate nearly matched the list price, then went down with the first price reduction. Then once it sold, it really went nuts.
Click here for the whole story:
http://sacramentoappraisalblog.com/2018/09/18/is-the-public-trusting-zillow-too-much/
Redfin does the same:
https://www.bubbleinfo.com/2018/04/13/redfin-estimates-based-on-list-price/