[tmarthal]

I think what you're actually seeing is the output of a Kalman Filter temporal model. The zestimate is the mean of the filter output, but the error bounds of the filter are more important than the actual mean/reported value.

What happens is that the model uses trends to extrapolate from each "real" data point (in this case, a house sale in your neighborhood). The problem is, and what Kalman Filters help manage, is the uncertainty propagation between each house sale. When it has been a long time from when a sale has occurred, it is unclear what the real/actual price is of a home. This means that on the estimated price the error bounds are large, and zestimate still just reports the mean value of this huge uncertainty.

What then happens is that a house is sold in your area, a new data point is recorded, and the filter re-adjusts itself and collapses its uncertainty/error bounds in the time of that measurement around the measurement. And you get correction. This is why the "old zestimate" is updated.