"In analyzing U.S. home sales data, the authors found that the availability of a Zestimate increases buyer surplus by nearly 6% on average and raises seller profits by more than 4%. These gains are largely attributed to sellers pricing homes more confidently, and being less likely to underprice properties or accept offers prematurely. The study also challenges concerns that algorithmic pricing tools disproportionately benefit higher-income neighborhoods."
"Instead, researchers found that the Zestimate produces larger gains in lower-income areas, where uncertainty around home values is typically greater. In these neighborhoods, buyer surplus increased by more than 9%, compared with smaller improvements in middle- and higher-income markets. Although researchers noted that the Zestimate's accuracy is somewhat lower in lower-income areas, they concluded that its overall impact remains positive because the tool still reduces uncertainty."
The availability of a Zestimate increases buyer surplus by nearly 6% on average and raises seller profits by more than 4%. Sellers price homes more confidently and are less likely to underprice properties or accept offers prematurely. Algorithmic pricing tools produce larger gains in lower-income areas where uncertainty about home values is greater, with buyer surplus increasing by more than 9% in those neighborhoods. Zestimate accuracy is somewhat lower in lower-income areas, but the tool still reduces uncertainty and yields a net positive impact. Clearer pricing signals narrow the gap between asking prices and buyers' willingness to pay and improve market matching. Further accuracy improvements in underserved areas could generate additional benefits.
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