[qxamak]

I have a friend who is a realtor and we talk about this subject occasionally. My understanding is that most realtors will recommend using Zillow to "get a feel" for the market. But Zillow's estimates are only as good as the data that goes into them. Usually, data for an area is publicly available and up-to-date, but sometimes it's very old or just plain wrong.

I think Zillow claims their estimates to be within 10% of actual sale price. To me, that figure seem to be pretty good from a data analysis stand point; but 10% of the value of a house is a lot of money for even a modest home.

Most realtors used closed databases, like MLS, to document sales and compare area housing prices. I believe MLS data is typically manually entered and verified (I'm not 100% sure about this though). I believe there is also a lot of extra metadata added to MLS listings that Zillow can't get from public records. Realtors also tend to look at property tax assessments for their areas in order to gauge market trends (just like Zillow does, except without a hidden algorithm).