Zillow Zestimates are generally not highly accurate but are useful starting points, with median error rates of approximately 1.9% for on-market homes and 7.1% for off-market properties, meaning they can vary significantly from actual sale prices. They are generally good for On-Market homes or areas with a lot of data, ie, sales and public records.
On the other hand, they struggle because they don't factor in the home's actual physical condition, and since they rely on public data, Zestimates tend to be inaccurate when data gaps exist. They are also inaccurate when market nuances arise. They struggle with hyper-local factors or unique properties that are not well represented in the data.