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Zillow and Other Z Words Are the Rage of the Internet
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According to the media last week the hottest new site on the web is Zillow.com.
This site was hit enough to crash it multiple times and its proprietors were speculating
that visitors were arriving and not leaving, tying up the site with multiple data
searches.
Why? Because it is all about real estate; better yet it is all about real
estate values.
The only subject more tantalizing than sex in the view of more or less mature
Americans is apparently the value of their homes and those of their friends,
neighbors, co-workers, or anybody who might have named them in a will.
Zillow has wrapped up in a single location data on 60 million homes, 40 million
with Zestimates (just wait a minute), throughout the country, making
it simple to search homes by address and get a physical description, recent
sales information if any, and data on the assessed value of the property.
According to CNETnews.com, one blogger on a real estate site went so far as
to say "As accuracy improves, Zillow may spell the end of appraisal
fraud. A quick Zillow search of a suspect appraisal will easily shine the
light on a padded value." This is mild compared to some other reviews
we have found.
Zillow's basic information has been available on line for some time but
in awkward and scattered ways. It has been accessible on assessors websites
from individual towns or counties or by slogging through real estate sales sites,
many of which do not provide a lot of information on individual houses or provide
addresses of properties. Searching these would make what we have done in short
order on Zillow a long and arduous process, first finding the websites then
searching by address, map and page, or a tax identification number. Information
from real estate sites are, of course, limited to current sales offerings.
The other alternative has been information on a few commercial sites such as
HouseValues.com. These, however, require visitors to register with
personal information which may then sold to real estate agents as sales leads.
Not needing any more salespersons in our life, we have not registered on any
of them but, according to news accounts they usually take several days before
information is emailed to the inquirer.
Zillow is free to anyone who wishes to check out the possible price of their
own home or that of others. No representative will call, and there is no limit
on the search.
Sounds like a wonderful idea? Can't wait to get on-line? Not so fast
bucko.
First of all, Zillow is brand new and the site is pretty upfront regarding
its limitations, something that the media has not always reported. It clearly
identifies itself as a beta site (a test operation using visitors' input
to check out its efficacy.) Zillow freely admits that there are a lot of holes
in its real estate database, many homes that are not covered and information
missing on lots of homes it does cover; and it became clear as we played with
it, that these are probably because certain areas - towns, neighborhoods
or counties, are not yet on line with the data that Zillow needs to work its
magic or don't collect the information themselves.
Secondly, Zillow is attempting to move beyond the assessors' data or that from
MLS powered sites. Apparently in love with the letter Z, the creators, at least
one of whom was among the brains behind the development of the hugely successful
travel site Expedia, have developed several words that describe the added value
that Zillow plans to bring to your search.
The most important is the "Zestimate." According
to Zillow's own website, they have taken "zillions" of data
points from public information and entered them into a formula to create a "proprietary
algorithm" or "secret formula." This Zestimate is now online
for 40 million houses with more to come as Zestimates can be computed.
This "secret formula" takes into account how homes in certain areas
are similar in terms of square footage, numbers of rooms, bedrooms, and a lot
of other details. It then looked at the relationship between similar homes (and
while it isn't directly stated, assessed value) and available home sales
data. This pattern is plugged into the formula to develop a market value
for individual homes. Various home characteristics are weighted according to
geography and the data's place in time. In other words we would assume
that a swimming pool or central air would carry a different weight in Florida
than in Minnesota and that the algorithm would more heavily weight hardwood
floors today than would have been the case in shag-carpet-happy 1979.
Historic Zestimates have also been computed over time to allow the visitor
to see how a home or an area has appreciated (or not) in value over the years.
Zillow also provides a value range that shows how much real information they
have about a home. The larger the range, the fewer data points were used to
construct the value and the less certain it is. To its credit, Zillow provides
a measure of its own accuracy by way of stars, one to four.
Some counties or towns provide ample data, others are lacking key information
such as a breakdown of rooms and four stars will tell you that Zillow has a
high confidence in its Zestimate. If the value is based solely on a tax value
there will be only one star. Zillow also provides information on individual
market areas, assessing the percentage of homes where Zestimates fall within
10 percent of the actual selling price and on the sufficiency of the data available
in each of the relevant SMSAs.
The other Z word is "Zindex".
Zillow could have said "median" since this word is one most people
understand. Nonetheless, Zindex is described as Zillow's Housing Index
and is the median Zestimate for a given geographic area on a given day. To quote
the Z site, exactly half the Zestimates for a region are below the number and
half are above it.
Is everyone getting sick of the Z words?
An interesting feature of Zillow is that it allows you to upgrade the value
of a home based on its unique features - the new kitchen, the gourmet
kitchen, the new bath. This is easy to use and allows users to break away and
customize the information available from public data bases.
We found, however, some real shortcomings. Hopefully these will be corrected
as the site moves out of beta status and reaches its full potential. This can
be a great addition to the growing arsenal of aids to the home buyer and home
seller. At present, however, there are some caveats beyond those that are confessed
by Zillow itself. We will talk about where we went and what we found in a later
article.
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home prices |
Comments (23)
| Sellers can shout from the roof tops that this is unjust, but picky buyers looking for smoke just found fire and sellers have NO opportunity to defend themselves. |
|
| Above Posted By:
Veronica
| Tue, 27 Feb 2007 22:48:37 EST |
| I have written for corrections or clarification and seen NO change or response. I believe it could be retaliation for signing off. I was thinking about selling but this liable without an opportunity to rebut is seriously dangerous. For those of you who think this doesn't matter consider that I first heard of Zillow from a friend of mines' Lender. Again, the admitted accuracy from Zillow is really low, but obviously lenders and buyers take any perceived weakness as hardfast truth. |
|
| Above Posted By:
Veronica
| Tue, 27 Feb 2007 22:48:25 EST |
| The value of my home on Zillow was priced comparable to the one that sold right next to mine, same floor plan when I first looked it up. I signed in to correct mild information that actually put it in better standing than the house sold next door and out of curiosity put it on Make Me Move. A day or so later I took it off, no longer curious. Since that time the house (again same as about 75% of the others on the street) has plummeted after being "one of the best" initially. |
|
| Above Posted By:
Veronica
| Tue, 27 Feb 2007 22:48:03 EST |
| My house was built in 1998. In Florida, values are capped at up to 3% increase/year. Therefore, all houses not recently built are priced far lower than their neighbors built recently. This is a built-in bias error Zillow perpetuates and makes my house far less valuable than houses purchased recently. |
|
| Above Posted By:
Anonymous
| Wed, 8 Nov 2006 10:58:12 EST |
| Pretty much useless in my neighborhood. Same house, same age, same lot, same square footage, same features, 2 doors down: one is priced $185,000 higher than the other oneand by the way, the sf is wrong. Same house again across the street listed with 200 sf more (wrong!), $400,000 higher than comparable houses. Totally useless and actually a detriment to those trying to sell their homes. I wrote to Zillow to correct square footage and inform them of price problems, no change. |
|
| Above Posted By:
Anonymous
| Thu, 22 Jun 2006 22:51:52 EST |
| Realtors: We are now offering a real-estate mapping package for real estate professionals like yourself which would allow you to map and display your MLS listings and/or real estate listings on the your website. Feel free to contact us if you would like to discuss our technologies and competences. |
|
| Above Posted By:
abe hoffman
| Mon, 8 May 2006 15:35:26 EST |
| Zillow is imaginative, interesting and may have a future. The challenges are enormous. As of the March 25 update - it is seriously flawed - My house is zillowed in at $188 sq. ft. and comps are $319 - next door house has zillowed sq. ft. at $369 and comps at $381. Should mention zillow boys have no info on beds or baths my place or past sale info. At present I would label site as VOODO REAL ESTATE akin to Voodoo economics. |
|
| Above Posted By:
bill
| Wed, 26 Apr 2006 22:52:59 EST |
| Zillow states my home is worth 33% less than actual value.
I am Florida waterfront. Zillow appraised my home with your typical lot. I agree, Zillow has alot to learn. |
|
| Above Posted By:
Katie
| Fri, 31 Mar 2006 12:38:16 EST |
| Hey, for those of you that are convinced that Zillow.com can accurately give you the correct value of your home, I have some $2000 stock market predictor software I would like to sell you too. |
|
| Above Posted By:
Mike Kollar - real estate agent
| Thu, 23 Mar 2006 19:03:07 EST |
| Jeeze people, this is new technology. The term beta means that it is still in development, remember!?! Besides that, the four-star system helps to judge the accuracy of the price posted. People should be a bit more happy that somebody cares enough about taking information and sharing it in a useful way. Trying to take some of the information away from the WAY overpaid realtors. I'm sure they are doing it for the money but what a great idea. Personally, I compliment them for their efforts! |
|
| Above Posted By:
Gerry
| Thu, 16 Mar 2006 01:47:57 EST |
| In many parts of the country where the real estate bubble exists, property values are not based on economic fundamentals, they are artificially inflated due to speculation, low mortgage rates, exotic no money down, interest only loans, corrupt appraisers, uniformed buyers, etc. Just because your neighbor next door sold their home for $400,000 does not mean that is really what it is worth. It just means someone was willing, or in many cases, stupid enough, to pay it! |
|
| Above Posted By:
John
| Fri, 3 Mar 2006 12:26:07 EST |
| Zillow uses a sq. footage approach to appraisal more than anything based on the average sq. footage price in any given area . This cost approach method on market sq footage costs has some merit . Zillow certainly uses market comps . Zillow doesnt add value on views, pools , or upgrading but has a section where one can add on for things like that . Its greatest value is it gives comps which people need to know about . |
|
| Above Posted By:
Connie
| Sat, 25 Feb 2006 23:50:00 EST |
| All these post do nothing more but give valueable feedback to Mr. Zillow on how to enhace his product offering and repair those inaccurate AVM's. It is called free quality control and testing. I think he is onto something here. |
|
| Above Posted By:
Marketing Ideas
| Fri, 24 Feb 2006 11:45:09 EST |
| Nothing worse in this field than old data. Four years ago I had an appraisal done on my house and it was 180K, at the same time an AVM was done and it came back at 176,500. Four years into the future, Zillow says my house is worth 184k. My Insurance agent ran an avm on it last Feb 05 and it was 225K. It seems like Zillow is only good as the old tax data and such, from many moons ago. |
|
| Above Posted By:
Gi GI
| Thu, 23 Feb 2006 14:24:19 EST |
| Zillow Zucks! The database is no where near accurate. So...like the last comment made.....if it is so inaccurate...then what's the purpose of the website? Providing cluless FSBO's with wrong information so they can overunder price their homes?? Maybe they should have spent some of the millions of dollars they have on perfecting the system before they launched it! |
|
| Above Posted By:
Becky
| Mon, 20 Feb 2006 08:49:38 EST |
| With all the serious innacuracies, this website is going to give Loan Advisors all over the country headaches if lenders give any weight to this "zestimate" most L.O.'s know that lenders already use Lexisnexis to do checks on borrowers and that info is not very accurate! This could really kill the purchase market if potential buyers start using it and think every home is overpriced! |
|
| Above Posted By:
Chad
| Fri, 17 Feb 2006 15:56:08 EST |
| Well, my experience is pretty positive. I have a few properties in Phoenix, AZ and Bay area, CA. I monitor my properties very closely and I know what their market prices are. My zestimates are really close and other information such as close prices, are all correct. My take is to give it a try and find out yourself. if its database is updated enough for your neighborhood, it should work pretty well. Once zillow updates it database current, more people will like me, use it for free at own rist.
|
|
| Above Posted By:
Gary
| Fri, 17 Feb 2006 01:42:33 EST |
| Interesting concept but values are not accurate so what's the purpose? |
|
| Above Posted By:
Anonymous
| Thu, 16 Feb 2006 10:29:52 EST |
| This website is highly inacurate. The values of the homes are not even close. A house valued at 380K will come back on Zillow as 212K. They have a serious database problem. They should consult with First American Real Estate Solutions. |
|
| Above Posted By:
Nabil Farhat
| Thu, 16 Feb 2006 10:24:21 EST |
| It's a very BASIC GUESS.
It cannot 'see' the house damaged by a storm or fire or anything else. It cannot 'see' the property is waterfront or has a spectacular view - or not - and compares to only what's close in proximity - or the property that is gutted on the inside.
Hey, it is free so everyone can use it at their own risk. VERY misleading in many areas and only decent for 'cookie cutter' neighborhoods in disclosure states. You can trust it about as much as a pie in the sky. |
|
| Above Posted By:
Anonymous
| Thu, 16 Feb 2006 10:06:12 EST |
| Beware the hype. It's just another Automated Valuation Model (AVM). The owner has deep pockets, and you just helped him by transforming a press release into "news".
The residence next door to me closed in January for $390K. One two doors down is pending for $425,000. Both are of compatible age and living area.
My "zestimated' value was reported at $274K.
Case dismissed.
You want news? I'll give you news, abeit old news:
Garbage in, garbage out. |
|
| Above Posted By:
Tawfik Ahdab
| Thu, 16 Feb 2006 09:36:45 EST |
| Fun with Zillow. Change the year your house was built. For some reason if your house was built in 2000 instead of say, 1956, it is worth a couple of hundred K less. At least mine was. Add a bedroom. 25k less. Two houses. Next door. Same sq footage, yard and house, 200k difference.
Suffice to say, needs work. And in the short term will cost some poor sod who has to sell his house and has a bad zestimate a lot of money. |
|
| Above Posted By:
scott
| Thu, 16 Feb 2006 00:02:15 EST |
| Zillow is a joke, the values are not even close to reality, especially in rapid markets like Phoenix or Tuscan or Seattle. Not even close to accurate values. You definitely get what you pay for, another tool to make undeducated people a bit more dangerous. |
|
| Above Posted By:
anonymous
| Wed, 15 Feb 2006 16:45:42 EST |
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