We bought the cheapest house in our neighborhood back in 2018. According to Zillow estimates it's now the most expensive on our street. Took some repairs and sweat equity.
How does zillow know you made repairs?
It doesn't. I've noticed that all the RE sites have a kind of recency bias. When a house sells, they seem to assign different values.
Here's an example: I mentioned the story of our house upthread. In 2018 we bought a flip house in the same town for $725k. It was a dump and we spent over a year doing a full gut remodel. We sold it for $1.2+k in late 2019. For comparison, our own clown house is custom-built, one story*, 2600 sf, 4BD, 3.5BA, 3-car 1050sf garage, bigger lot, better neighborhood, blah x3. The flip house is a two-story, 1900 sf, 3BD+2.5BA, 2-car garage in a less desirable part of town. Though it's full of custom cabinetry and updated finishes, it's still a boxy tract house in a neighborhood of similar homes. Oh, it's in a Flood Zone and requires extra insurance, too.
Zillow pings us every time the value changes. The flip house "Zestimate" is now the same as our primary, which we purchased in. 2013. We see this over and over. For free mustachian entertainment, choose any neighborhood of tract homes. The ones with the highest value will be those that were most recently sold.
*Our population skews much older than average. Therefore, single story homes command a premium, particularly if they're large. Also, our house has 14' ceilings in the living areas and 9' in the bedrooms. The flip house is the standard 8' everywhere. Lovely as the flip house is, there's no comparison. On the open market there's no way they would sell for the same price.