...Depends who you ask.
-If you ask the Tax Assessor, they will tell you its worth the value of the land the home is on + the relative value of the dwelling on the land. They will then tax you accordingly.
-If you ask the Banks Appraiser, they will tell you, based on other like kind SOLD properties what the home is worth and therefore what the bank is willing to lend you on that particular property (be it for purchase or refinance).
-If you ask me, "I don't know, I haven't seen your house yet!" But in all honesty, I (the Realtor) will look at the characteristics of the house as it is on paper (beds, baths, square footage) + the condition of the home (clean/dirty, updated/never been touched, etc). Then I will look at other Sold and Active properties on the market surrounding your home and compare and contrast them to your home and create what we call a Comparative Market Analysis.
-Finally the "Zestimate" is "Zillow's estimated market value for an individual home. It is a starting point in determining a home's value and is not an official appraisal. The Zestimate is automatically computed daily based on millions of public and user-submitted data points." That being said, Zillow doesn't live here in our market and can only make a computer generated guess as to what your home might be worth based on like sales posted in the area (by realtors or For Sale By Owners) and tax assessments (which are public record).
All in all these are all worth while tools and any number of them used in combination can help you determine a good starting point of what your home might actually be worth.