Re: what would you do?
Its a data point.
From what I can tell, they dont show froth very well, and they're a lot better if you pick your own comparables that are actually comparable.
Whats interesting is being able to freely GET comps on your own, do a drive-by on some of those to see what they look like, see what other people in the town/region/state are paying, see some of the trend lines, etc.
The birds eye view feature is just a killer, again...if your area has the high resolution shots. You can zoom in so close you can see whats in the back yards of your neighbors, all in faux 3D. You can see stuff thats not even viewable when you get to the property like adjacent lots and neighborhood features.
I looked at a lot of property and saw what it was (trying) to sell for, looked at a lot of comps, got a feel for the neighborhood, saw the zillow normal and customized numbers, and took the sellers position as well as my own into consideration before I felt good about a number.
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.