You might think that I am anti-zillow because I challenge its estimates and accuracy. Some real estate folks are down-right shaking in their flip-flops, afraid that zillow, trulia, etc are going to replace them. I’m not worried about being replaced. I’m concerned about the time we now need to spend explaining to clients and customers why their house value estimates are so far off. “It says it right here, on the screen” they exclaim!
This whole game of throwing out numbers, based upon formulas that don’t take vital tangible and intangible facts into account, is a negative reflection on the real estate industry as a whole and makes us all look like fools. Fact is, a great many residences and properties in markets like the Hamptons and Manhattan are unzillowable (see Sellsius RE Blog) and they should just be big enough to admit where they can’t provide proper info and stop trying to hide behind the tiny little “beta” they have so cleverly integrated into their logos.
I would love these value estimator sites to be accurate – it would make our jobs easier and allow me to focus on building my brokerage, and it would better serve our clients and customers. md
Some excerpts from the WSJ article:
By James R. Hagerty
From The Wall Street Journal Online
…off the mark by more than 25% on one in 10 homes. In one case it was off by $2 million.
…Zillow came within 5% of the price in a third of the transactions studied by The Journal. It was more than 25% off target on 11% of them. In 34 of the 1,000 transactions, Zillow was off by more than 50%.
…Zillow may be fine for “cookie-cutter” neighborhoods but “they can’t compute” the values of the luxury homes she sells.
…Zillow executives acknowledge that the estimates can be way off in some cases.
…It is less accurate for low- and high-end homes because there are fewer of those and thus less data available from comparable sales, known as “comps.”
…one of his clients last year lost his chance to buy an attractive home because, relying on Zillow, he made an unrealistically low offer.
Oh, that’s right- there are still in BETA. I guess that explains it. md