Redfin just published a study showing that the Redfin Estimate more accurately predicted the value of thousands of homes listed for sale than estimates from the other leading providers of public home-value estimates.
Of the more than 5,000 home sales evaluated in the study, 64 percent sold within 3 percent of the price predicted by Redfin, compared to 29 percent for Zillow and 16 percent for Homes.com. The median error rate of the home-value estimate for listed homes was 2.06 percent for Redfin, 5.95 percent for Zillow and 10.26 percent for Homes.com.
“Our findings are clear: Redfin performed significantly better than Zillow and Homes.com at predicting home-sale prices,” said Dr. Aniruddha Banerjee, SSRS’s senior vice president of advanced analytics. “We hope that others attempt to replicate our results. Our methodology for coming to this conclusion was consistent with the rigorous approaches taken at academic institutions.”
Each Sunday through Thursday between Oct. 19 and Nov. 30, 2016, for the 194 census-defined U.S. metropolitan areas where Redfin has listing and estimate data, Redfin sent SSRS a file including all residential homes that had a new sale pending. From this file, SSRS randomly selected 500 to 1,000 homes each day, until by Nov. 30 a total of 24,789 pending sales were under evaluation. The homes in this sample spanned 7,531 postal codes and 189 census-defined metropolitan areas, and included single-family homes, townhouses, co-ops and condominiums. Within 36 hours of being notified about the pending sale of a home, SSRS noted the home-value estimates from Redfin, Zillow and Homes.com. When the home sold and its sale price was published, SSRS then compared the estimated values with the actual sales price. 6,338 had closed by November 30. 5,661, or 89 percent of the closed sales, had home-value estimates from both Zillow and Redfin. 5,074, or 80 percent, had home-value estimates from both Homes.com and Redfin.