For my three houses, their assessment can be on and off but by and large within reasonable range to what I think the market value is. I feel they follow market trends in the neighborhood more, sometimes not to your specific area or community. I usually would also check other sources: Realtor.com and Chase home estimator, which can also be very different.

Example of my recent purchase: Redfin and Zillow assessment about 5-10K apart most of the time, while Chase is 80-100K higher than both, and Realtor.com shows quite different estimates from 3 sources. My appraisal with 3-6 comparators came in the middle, about 50K above Redfin/Zillow and 40K below Chase, and 30K above my purchase price.

We have lived in our house since 2009 and Zillow and Redfin have usually been within 5% of each other and accurate for our home, neighborhood, etc. Several months ago our Zillow value went down to our SEV (in Michigan, this is State Equalized Value, it's the property assessed value set at ~50% of market value). No one else in our neighborhood changed, and we know it's way off and have no idea why it would change like that. So to answer your question, it can all be wrong for many reasons. Redfin did not change.

They don't know about your renovations and price according to the neighborhood. So if most houses that sell in your neighborhood are renovated, but yours is not, the estimate will be too high (and vice versa). We sold our house for 20% above its redfin estimate because it was beautifully renovated (or at least this is what I think). I just looked up the estimate for our current house and I doubt we could sell it for this much. So think of the estimate as a starting point that you then adjust up or down based on the features of your home (that redfin does not take into account).