Reuters reports that Zillow Group has won the dismissal of a federal lawsuit in Chicago challenging the accuracy of the online real estate website's 'Zestimate' tool for estimating U.S. home values.
In May this year, homeowners sued Zillow complaining that its computer algorithm for Zestimates often undervalued their homes, sometimes by hundreds of thousands of dollars, making them harder to sell, and constituted illegal "appraisals."
The U.S. District Judge presiding over the case, Amy St. Eve, however, said Zestimates are a mere "starting point" that are unlikely to confuse homebuyers, pointing to disclaimers by the Seattle-based company that they may be inaccurate and are not official appraisals.
"The word 'Zestimate' - an obvious portmanteau of 'Zillow' and 'estimate' - itself indicates that Zestimates are merely an estimate of the market value of a property," the judge wrote.
In a statement, Zillow said it was pleased with the dismissal, and called Zestimate "the most accurate computerized home value estimate anywhere".