How Accurate Is Your Zillow Estimate in San Diego?

By Rieder Homes

Dennis and Mance Rieder are the dynamic father-and-son duo behind Rieder Team Realty, bringing decades of combined experience and a genuine passion for the San Diego real estate market.

If you’re thinking about buying or selling a home in San Diego, chances are you’ve already pulled up Zillow to see what it says your home is worth. Most people do. It’s the first place families go when they start thinking about making a move.

But how accurate is that number, really?

We’ve seen it be off by $50,000 or more. And we don’t mean that as a scare tactic. We mean that as a fact based on real transactions we’ve handled right here in San Diego.

Take a home we’re actually listing this week. Zillow’s estimate came in about $50,000 below what we expect the market to tell us. The reason? The property had an addition done years ago that added roughly 400 square feet to the home, but the tax records were never updated. Zillow’s algorithm was pricing the home based on a smaller footprint because that’s all the public records showed. The moment we list it, that estimate will likely jump, but until then, the homeowner was looking at a number that significantly undervalued their property.

On the flip side, we had another listing where Zillow said $950,000. That sounded great on paper, but the reality was different. The AC didn’t work, the appliances were failing, and there were squatters in the property that wouldn’t leave. The real value based on the home’s actual condition was closer to $850,000. Our gut and the data aligned, and once we priced it right, we got an offer right away and closed the deal.

So the Zestimate can miss in both directions.

Here’s how Zillow actually comes up with that number. They use what’s called an AVM, or Automated Valuation Model. It pulls from public records, looks at recent sales typically within about a mile of your property, compares homes with similar square footage, reviews tax data, and analyzes geographic trends across the area. It’s processing large amounts of data across many homes at once.

The problem is it can only see what’s recorded publicly or available online. It can’t walk through your home. It doesn’t know you redid the kitchen last year or added a pool or put on a new roof. It can’t assess your curb appeal, the condition of your systems, or what makes your specific street more or less desirable than the one a block over. And it relies on government records and city data that are often delayed or outdated. Interest rates fluctuate, job growth shifts, and local demand changes faster than the algorithm can keep up.

The margin of error matters. For homes that are actively listed on the MLS, we’re seeing about a 2-3% difference between the Zestimate and actual market value. But for homes that aren’t listed yet, that gap widens to 6-7%. On a $600,000 home, a 7% miss is over $40,000. That’s a significant amount of money to leave on the table or to overpay by.

This affects buyers, too. Many buyers will look at the Zestimate before they even decide whether to tour a home, and they use it as a reference point for what they’re willing to pay. If the estimate is low, it can lead to lowball offers that don’t reflect the home’s true value. If the estimate is high, buyers sometimes wonder if something is wrong with the property because it’s priced below what Zillow shows. We’ve had clients come to us and ask why a home is listed $30,000 below the Zestimate, assuming there must be an issue, when in reality the seller did everything right and priced the home based on actual market data.

As Dennis likes to say, think of Zillow like a weather app. You’ll see the numbers, but you still want to step outside and kick the tires to see what’s really going on.

The Zestimate is a starting point. It’s a great tool and a great app, but that’s all it is. Real estate is a hyperlocal market, and in a city like San Diego where neighborhoods, streets, and even blocks can vary dramatically in value, you need someone who knows the area personally.

If you want to find out what your home is actually worth, we’d love to help. We can compare your Zestimate to your real market value, pull local comps specific to your neighborhood, and walk through your home to see what upgrades and features the algorithm is missing. You might be underpricing or overpricing your home without even realizing it.

Call us at 858-779-0823, email us at info@riederhomes.com, or visit riederhomes.com. We’re here to help you find the true value of your property.