I am quite disappointed in the research that went into this article.
(1) Author discovers that Zillow has a specific claim about accuracy: "around 90% of the listing Zestimate is “Within 20% of Sale Price” of the home". Author then gripes that this is "a really large margin for error". Really? Because I was prepared to praise Zillow for such honest and clear reporting. It only costs a few hundred dollars per home (Zillow covers nearly every home in the US) to get a professional to produce an assessment, and these assessments are usually only a little more accurate than what Zillow is claiming.
(2) Author pulls up tables from Zillow showing a median error. Which is an excellent way to analyze this and is (I think) extraordinarily small. Author then proceeds to do other stuff.
(3) Author decides to verify the values by checking a total of NINE houses. Is the accuracy of that test expected to impress us? Furthermore, one of these 9 is rejected because "(obviously a data glitch or input error. Dismiss this result)" -- but that's the whole POINT of using median error; it isn't affected by outliers.
(4) Author finds that all of the values (all 3 of them) in Staten Island were pretty far off. Author asks professionals who say that the local market o Staten Island is behaving quite unusually at the moment. Reporting on this is the only thing I think the author did right.
Yeah people dump on Zillow quite a bit. Probably because home values can be a very emotionally stirring event.
Zillow's aggregate economic data is solid, often a better predictor than the Case Shiller Index. I expect that Zestimates will improve over time as the data trickles down and lessons are learned.
> "around 90% of the listing Zestimate is “Within 20% of Sale Price” of the home"
Yes, this sounds pretty good to me. I spent some time trying to do something sophisticated for the estimates on my site https://houseprices.io/ using repeat sales of similar properties weighted by distance, but I wasn't getting anywhere near that. I gave up and just used the Land Registry index for the county in the end. There are just so many potential local factors which you're never going to capture algorithmically, not least of which is how much the current owner might have spent doing it up. Although I do get the occasional irate message in my Contact Us form telling me exactly how much!
I feel like disappointing research is going to be a given when you have such an obvious conflict. The author has a strong motivation to make Zestimates seem bad (the less reliable the resources you have to buy/sell a home on your own are the more you'll need to contact them) and a million degrees of freedom (which neighborhoods in which cities, price floor for consideration, how many examples to pull ...) to get the answer they want.
"Research" of this type should probably never be trusted.
I'm not sure at all how you can make conclusions from just 9 houses. I've been house hunting recently. Even houses in the same neighborhood are very different, and there are a lot of factors going into valuing a house. Also may be very subjective - some people would pay a lot for things that other people don't care about. Maybe Zillow is uniquely bad at one or two out of 20 factors - e.g., it can not detect a house in a good neighborhood that has been neglected and needs a lot of repair (I've seen houses in very good places that looked great from outside and required tens of thousands dollars of work on the inside just to be livable - maybe that's what happened to that -75% house - maybe it had a recent fire or flooding). Or maybe it doesn't value having a pool correctly. Who knows. But it's impossible to figure that out from only 9 houses, 3 per huge market! You need hundreds of data points to smooth out the individual differences and cancel out noise from all different criteria. That's exactly what Zillow's advantage is supposed to be - to aggregate thousands of data points. Maybe they do a good job, maybe not, but I don't think you can evaluate it by just using mere 3 houses per market of millions!
I don't have an opinion on whether zestimates are accurate. But this blog post has 9 samples from only 3 cities. And the author seems to be making claims based on that. This is a lame "thought leadership" post as a subtle ad for his company.
At least give me 10-20 homes in each of 10-20 cities if you are trying to convince me of something systematic.
The only really interesting thing I saw in this post was the discussion with realtors. It's significant that Zillow uses long-term averages, and therefore can't price in abrupt market shifts even once they're common knowledge. If nothing else, it implies that "Zestimates" are a bit dubious in tight urban markets where high variance is more possible. Of course, it also looks like Zillow is aware of that challenge.
The ostensibly data-driven part was by far the least convincing section - as soon as I saw the sample size I decided it was nothing more than a starting spot-check.
Agreed. If you're going to try to do any sort of data-driven study, citing a sample size of 3 houses per market is ineffective and very likely to be misleading.
It's even worse than that, really. The author actually concedes that Zillow's listed median error is accurate--but then cherry picks a few cases that are outside that margin, and uses these to make sweeping claims about how its time to stop using Zestimates. But, of course, a few cases outside the median error, here or there, are virtually guaranteed to exist no matter how good the model is.
It seems to me that the real news here is actually that the Zillow median error is really good, given the data they have to work with and the scale on which they are operating. Of course, this does not mean that the Zestimate will be valuable in all cases. Individual buyers, sellers, and their agents and appraisers will often have fer better information about any given home. But everyone should have realized this already.
SF Bay area, I've had 3 formal house assessments, & each time they "start with" Zillow et al to look at "reasonable values in the neighborhood". Which seriously affects your ability to refi, etc.
So Yeah Zillow has an effect. It's worth it to create a login & enter in your upgrades, so your ZESTIMATE goes up.
I'm pretty sure that when they say they start with Zillow, they are referring to the feature where it shows recent past sales in your neighborhood, which is an entirely legitimate input into determining a formal appraisal.
It's worth it to create a login & enter in your upgrades, so your ZESTIMATE goes up.
Very nice, thank you, my Zillow estimate is now $5965 higher. We have no intention to sell but if we do, at least I can start the negotiations at a higher price point by pointing to Zillow.
Who is doing these "formal assessments"? Are these broker price opinions (performed by a real estate broker)? It seems very odd they would use Zillow data instead of the MLS to find comps.
Realtors who feel threatened by Zillow love to complain about Zestimates. Zillow has made it clear time and time again that they are not 100% accurate and even allow homeowners to edit them.
Zestimates are a tool that homeowners like to use. Zillow knows that. Good Realtors won't feel threatened by it but instead leverage it to provide prospects with a much more complete and accurate estimate.
Realtors need to stop blaming Zillow & Zestimates for their own weaknesses. It is getting old.
Zillow deserves a fair share of the blame because they prominently feature a single number with dollar-level precision and bury the caveats multiple clicks away on a separate page.
Some basic UI changes could avoid all of that: e.g. instead of showing $123,456, show a range like $115,000-135,000, and keep the last few digits at zeros based on their estimated error rates. Similarly, their graphs could use shading to make it clear that they're showing the mid-point of a range rather than a discrete value.
I bought a home last year, and each realtor I talked to brought up how terrible Zillow was before I ever mentioned it. If you look at the WaPo article all the comments are by other realtors, so I'd take those comments with a grain of salt. Oddly, my mortgage guy never looked at Zillow (that I saw) for figuring out values, so shrug.
I'm sure the data is inaccurate, but it's somewhere to start the conversation and let people feel like they have some power in the process of buying and selling homes.
And as people like to say about Uber, realtors are welcome to make a competing site that's as free and easy to use.
My bro-in-law became a real estate agent a couple years ago. Recently we were discussing Zillow, and he went into a tirade about how terrible it is. I just mentioned that it's a good tool to gauge the price trends of my neighborhood, but he began countering with canned, carefully scripted responses that sounded like indoctrination from his broker/employer. I just sighed, before the topic turned to how important it is to pay the full 6% when listing your house.
The real estate industry is one of the most protectionist industries out there, and any threat of disruption, no matter how minor, is met by an army of vitriol.
I found and bought a house through Zillow and the selling agents were really irritated by this, and in many cases would ignore the Zillow agent (who was great). I think a lot of this is the fear of competition and the threat to their bottom line
> Oddly, my mortgage guy never looked at Zillow (that I saw) for figuring out values, so shrug.
A few years back I called Wells Fargo to get some info on refinancing, and the first thing the loan agent did was get on Zillow to calc the existing LTV.
Zillow's Zestimates are particularly obnoxious because they provide little detail regarding why the values change and they retroactively revise them. I bought a house this summer that had an inexplicable drop in estimated value of about 15% a month or two before the house was listed. I paid closer to the previous estimated value than the post-drop value. Now when I look at the house on Zillow, the drop is nowhere to be seen and the past year is a smooth, barely sloping line. Never was there any indication of why they had a 15% drop, which was particularly frustrating when trying to determine how much to offer for the house.
Interesting. While I agree the results are likely to be inaccurate, this case study targets only the three largest cities in the US. Urban centers probably aren't the best population from which to sample.
In a case like this, we'd probably want to use locations based on number of home sales; and even then, we'd need to account for the amount of time between homes changing hands i/e houses that are flipped. There's likely something to be said about the difference between the nation's average sale price and each area's average sale price; assuming that may affect Zillow's estimations.
Anyways, I like that you're doing studies like this, regardless.
There are ~100M homes, ~3k counties, ~27k zipcodes, and ~300k neighborhoods and subdivisions that all have different market dynamics. A sample size of 9 make this analysis completely meaningless.
Equally important, is that the author of this article doesn't appear to know much about how the real estate data industry works (especially in regards to market trends and how they are used to generate the Automated Valuation Models (AVMs for short). A bit surprising given the nature of the business he is representing.
The Zestimate is one of a handful of Automated Valuation Models (AVMs in industry speak) - it's the only one with a consumer-facing brand, and as a result sees the most scrutiny despite the fact that the other AVMs on the market are the ones actually used by the banks during the appraisal process.
If you think the Zestimate is bad, you should see some of the other commercial AVMs.
The reality is that creating an automated valuation for the ~100M properties in the US is an incredibly difficult task given the availability of data (or lack thereof!). Zillow does a pretty darn good job and has a bit of a data advantage given its incredibly high coverage of for sale listings (though they lack the experience - some firms have been producting AVMs for decades!).
Another thing to note, is that AVMs (like any statistical model), usually aim for a sweet spot that covers as many homes as possible. As a result, ultra high-end properties are often incorrectly valued. E.g. that $25M mansion down the street will be very hard for the model to price. Additionally, certain luxury features, like say, a tennis court, are almost impossible to incorporate into these models on a national scale.
Better question is "how bad are the compared to those of professional appraisers who look at half a dozen comprables?" An even more important question is "how biased (based on who is paying) are those professional appraisers?"
Considering a Zestimate doesn't take into account anything about the aesthetics or actual character of the house, being off by 20% doesn't seem like it is that much. People respond to more than just the pure square footage and neighborhood. The Zestimate should be taken as nothing more than a directional starting point for someone who doesn't have the time to actually look at neighborhood comps.
Exactly...looking at a neighborhood of $500k houses, a fixer-upper vs a recent remodel could easily change the price by 20%, and Zillow obviously doesn't have attributes for the condition of the house.
I looked my house up on Zillow and it is showing an estimate of about $80k. My homeowner's insurance has it covered up to $75k, the county tax assessor lists the FMV as about $50k, and I owe $37k on it. My own estimate is about the same as the tax assessor's, and I wouldn't ask more than $50k when it comes time to sell it, given the work it needs to get it up to the Zillow estimate in my eyes.
Looking at other houses in the area, my house appears to have a much higher perceived vs actual value, based on Zillow estimates alone. For example, my neighbor's house on Zillow is supposedly worth $90k, but I'd put it closer to $100k based on her lot size, house size, overall condition, and age of the house (I'm friendly with my neighbor so I know a little about her property's history and makeup). In other words, her Zestimate is a bit lower than what a reasonable person would put it at, whereas mine seems greatly inflated. Perhaps this is due to Zillow "grading on a curve"; it would seem odd if one house was rated at half the value of its neighbors, so mine gets brought up to the lower end of the average range even though it doesn't deserve it. That's purely speculation on my part though.
While we're at it, lets also figure out why my Zestimate dropped $40k overnight two months ago. If I was planning to sell, I would have a huge problem on my hands. On top of it the Zestimate chart shows no indication that they dropped it $40k. Aiming to fix the number is a fool's game : my "private home estimate" on my owner dashboard is 23% higher.
Its a worthless number, and they should stop trying to manipulate the market. Having a secret measurement formula that works for 70% of the houses but not the other 30% needs to either have a disclaimer that its all fantasy, or just outright be removed. I'm guesstimating those 70/30 numbers, but their site gives some locations 2 stars on their own scale: http://www.zillow.com/zestimate/#acc. If its not 4 stars, then don't publish it.
From time to time, Zillow rejiggers (that's a technical term) their algorithm, resulting in sudden readjustments of estimates. Given that the Zestimate itself is presented as a fairly wide range, the error margin is hardly hidden.
Also, it is important to remember that no appraiser from Zillow has actually looked at your house; the data is drawn entirely from sales data, public records, and volunteered information. So there's no way it can really account for every factor, nor does it even try. And there's a lag; the market can change faster than Zillow can. It is, at best, a rough ballpark estimate of what's going on in your neighborhood.
I paid $265,000 for my house, which at the time had a Zestimate around $500,000. After our purchase, the Zestimate slowly rose over $950,000. While I understand we got a good price on our building, I knew the Zestimate was garbage.
A couple of weeks ago, the Zestimate dropped to $435,000. This would definitely be closer to an accurate value, but there's also no record of the recalculation at all in the graph.
My house is recently on the market and the Zestimate and Redfin estimate dropped by 50k the day we listed. It's still higher than we listed but much closer to our number. I think we priced it fairly as we are having plenty of interest but I wonder what would be happening if it didn't change.
I just bought a home myself and looked this up, but the takeaway is that the Zestimate is within +- 5% 50% of the time. So, not that accurate. Are people really using it in negotiations though? I'm sure people do, but you'd have to be pretty uninformed to do so, and I'm also sure you're real estate agent would tell you exactly that up front.
I use Zillow to give me a ballpark number for prices in an area I don't know well. My experience is that they are usually within 20% of the market price, which coincidentally they say on their website. For a free automated service, Zillow is great. If you want a better number, do your own comp analysis, or hire an appraiser.
I've been working in the mortgage industry for the past few months and have learned a bit about the business.
What Zillow does with its Zestimate product really isn't that novel. There is a whole class of products available called AVMs (Automated Valuation Models) which are used in the industry which pre-date Zillow's Zestimates. What Zillow did which was innovative was brought this type of product to the general public, for free.
In some cases an AVM is all that is needed to secure certain types of loans such as HELOCs.
I find Zestimate over time to be useful. I've been watching my Arizona property climbing up since 2010 when it was estimated at rock bottom, or about 50% of its purchase value (sigh). Now it's estimated to be about 90% of its pre-crash value. But as with all private transactions, bottom line it's worth what someone's willing to pay for it.
In my experience, Zillow does a terrible job compared to local knowledge. My zip code is weird—our ~$275k house backs up to houses worth $50-70k (the disparity is due to build quality, lot size, and the streets they're on). Not surprisingly, Zillow handles this very poorly, and has consistently valued our house at much lower than it is actually worth (based on city assessments and sales of nearby comps).
Interestingly, Zillow recently bumped up our Zestimate from $190k to $230k. What's puzzling is that they also bumped up the historical Zestimates—there isn't a big jump shown on the graph on their site (though there is a big jump shown in my Personal Capital account, which uses Zestimates as part of their net worth scores). Either they modified their algorithm in a way that affected values retroactively, or they're trying to disguise the fact that their previous Zestimates were way off.
> What's puzzling is that they also bumped up the historical Zestimates
There are two things a "historical estimate" could mean:
1) What did Zillow say the value was on day X?
2) What does Zillow now think the value was on day X?
You and others seem to be thinking of (1), but I think Zillow actually is doing (2). Since the goal is to figure out what the house is worth and how its value has changed, I think (2) is actually the right metric here.
> Either they modified their algorithm in a way that affected values retroactively, or they're trying to disguise the fact that their previous Zestimates were way off.
Probably the latter. Although, it could be that the data points are calculated on the fly or starting from some arbitrary value.
Then again, since it's shady to begin with, disguising their mistakes wouldn't surprise me.
Whether or not the data collected in this article is questionable, there's a pretty easy way to evaluate the price of your home: re-finance / hire an appraiser. If you believe your home to be worth more, wouldn't it be worth the $200 or so to increase the value of your home by thousands by having an accurate market research from a qualified appraiser? I got mine as part of my refinance package, so I have a very accurate estimate of what my home is worth, comped out against other homes in my area that sold recently at a similar location/sq ft/etc. Not sure why you feel the need to use questionable data points like Zillow in the first place.
[+] [-] mcherm|9 years ago|reply
(1) Author discovers that Zillow has a specific claim about accuracy: "around 90% of the listing Zestimate is “Within 20% of Sale Price” of the home". Author then gripes that this is "a really large margin for error". Really? Because I was prepared to praise Zillow for such honest and clear reporting. It only costs a few hundred dollars per home (Zillow covers nearly every home in the US) to get a professional to produce an assessment, and these assessments are usually only a little more accurate than what Zillow is claiming.
(2) Author pulls up tables from Zillow showing a median error. Which is an excellent way to analyze this and is (I think) extraordinarily small. Author then proceeds to do other stuff.
(3) Author decides to verify the values by checking a total of NINE houses. Is the accuracy of that test expected to impress us? Furthermore, one of these 9 is rejected because "(obviously a data glitch or input error. Dismiss this result)" -- but that's the whole POINT of using median error; it isn't affected by outliers.
(4) Author finds that all of the values (all 3 of them) in Staten Island were pretty far off. Author asks professionals who say that the local market o Staten Island is behaving quite unusually at the moment. Reporting on this is the only thing I think the author did right.
[+] [-] DennisP|9 years ago|reply
1) Pick three homes that you feel are comparable.
2) Pick out the material differences between those homes and your client's
3) Make up a value for each of those differences, and adjust accordingly
(Unofficially speaking) If you don't like the number you come up with, just make different decisions in steps 1-3 until you get the number you want.
[+] [-] dforrestwilson1|9 years ago|reply
Zillow's aggregate economic data is solid, often a better predictor than the Case Shiller Index. I expect that Zestimates will improve over time as the data trickles down and lessons are learned.
[+] [-] hanoz|9 years ago|reply
Yes, this sounds pretty good to me. I spent some time trying to do something sophisticated for the estimates on my site https://houseprices.io/ using repeat sales of similar properties weighted by distance, but I wasn't getting anywhere near that. I gave up and just used the Land Registry index for the county in the end. There are just so many potential local factors which you're never going to capture algorithmically, not least of which is how much the current owner might have spent doing it up. Although I do get the occasional irate message in my Contact Us form telling me exactly how much!
[+] [-] pdubbs90|9 years ago|reply
"Research" of this type should probably never be trusted.
[+] [-] smsm42|9 years ago|reply
[+] [-] jannotti|9 years ago|reply
At least give me 10-20 homes in each of 10-20 cities if you are trying to convince me of something systematic.
[+] [-] Bartweiss|9 years ago|reply
The ostensibly data-driven part was by far the least convincing section - as soon as I saw the sample size I decided it was nothing more than a starting spot-check.
[+] [-] kosei|9 years ago|reply
[+] [-] pdabbadabba|9 years ago|reply
It seems to me that the real news here is actually that the Zillow median error is really good, given the data they have to work with and the scale on which they are operating. Of course, this does not mean that the Zestimate will be valuable in all cases. Individual buyers, sellers, and their agents and appraisers will often have fer better information about any given home. But everyone should have realized this already.
[+] [-] alexpetralia|9 years ago|reply
[+] [-] donmaq|9 years ago|reply
So Yeah Zillow has an effect. It's worth it to create a login & enter in your upgrades, so your ZESTIMATE goes up.
[+] [-] bertjk|9 years ago|reply
[+] [-] exhilaration|9 years ago|reply
Very nice, thank you, my Zillow estimate is now $5965 higher. We have no intention to sell but if we do, at least I can start the negotiations at a higher price point by pointing to Zillow.
[+] [-] ensignavenger|9 years ago|reply
[+] [-] eanzenberg|9 years ago|reply
[+] [-] 20years|9 years ago|reply
Zestimates are a tool that homeowners like to use. Zillow knows that. Good Realtors won't feel threatened by it but instead leverage it to provide prospects with a much more complete and accurate estimate.
Realtors need to stop blaming Zillow & Zestimates for their own weaknesses. It is getting old.
[+] [-] acdha|9 years ago|reply
Some basic UI changes could avoid all of that: e.g. instead of showing $123,456, show a range like $115,000-135,000, and keep the last few digits at zeros based on their estimated error rates. Similarly, their graphs could use shading to make it clear that they're showing the mid-point of a range rather than a discrete value.
[+] [-] drewbuschhorn|9 years ago|reply
I'm sure the data is inaccurate, but it's somewhere to start the conversation and let people feel like they have some power in the process of buying and selling homes.
And as people like to say about Uber, realtors are welcome to make a competing site that's as free and easy to use.
[+] [-] joeax|9 years ago|reply
The real estate industry is one of the most protectionist industries out there, and any threat of disruption, no matter how minor, is met by an army of vitriol.
[+] [-] gedy|9 years ago|reply
[+] [-] toomuchtodo|9 years ago|reply
Financing still lives and dies by the professional appriasal; as long as banks prefer that, Zillow has zero pull.
[+] [-] joeax|9 years ago|reply
A few years back I called Wells Fargo to get some info on refinancing, and the first thing the loan agent did was get on Zillow to calc the existing LTV.
[+] [-] achileas|9 years ago|reply
[+] [-] coredog64|9 years ago|reply
So people who take percentage of the deal disparaged a tool that would net them less money...quelle surprise.
[+] [-] mi100hael|9 years ago|reply
[+] [-] dvdhnt|9 years ago|reply
In a case like this, we'd probably want to use locations based on number of home sales; and even then, we'd need to account for the amount of time between homes changing hands i/e houses that are flipped. There's likely something to be said about the difference between the nation's average sale price and each area's average sale price; assuming that may affect Zillow's estimations.
Anyways, I like that you're doing studies like this, regardless.
[+] [-] ahulak|9 years ago|reply
Equally important, is that the author of this article doesn't appear to know much about how the real estate data industry works (especially in regards to market trends and how they are used to generate the Automated Valuation Models (AVMs for short). A bit surprising given the nature of the business he is representing.
The Zestimate is one of a handful of Automated Valuation Models (AVMs in industry speak) - it's the only one with a consumer-facing brand, and as a result sees the most scrutiny despite the fact that the other AVMs on the market are the ones actually used by the banks during the appraisal process.
If you think the Zestimate is bad, you should see some of the other commercial AVMs.
The reality is that creating an automated valuation for the ~100M properties in the US is an incredibly difficult task given the availability of data (or lack thereof!). Zillow does a pretty darn good job and has a bit of a data advantage given its incredibly high coverage of for sale listings (though they lack the experience - some firms have been producting AVMs for decades!).
Another thing to note, is that AVMs (like any statistical model), usually aim for a sweet spot that covers as many homes as possible. As a result, ultra high-end properties are often incorrectly valued. E.g. that $25M mansion down the street will be very hard for the model to price. Additionally, certain luxury features, like say, a tennis court, are almost impossible to incorporate into these models on a national scale.
[+] [-] intrasight|9 years ago|reply
[+] [-] kosei|9 years ago|reply
[+] [-] Neliquat|9 years ago|reply
[+] [-] byoung2|9 years ago|reply
[+] [-] morganvachon|9 years ago|reply
Looking at other houses in the area, my house appears to have a much higher perceived vs actual value, based on Zillow estimates alone. For example, my neighbor's house on Zillow is supposedly worth $90k, but I'd put it closer to $100k based on her lot size, house size, overall condition, and age of the house (I'm friendly with my neighbor so I know a little about her property's history and makeup). In other words, her Zestimate is a bit lower than what a reasonable person would put it at, whereas mine seems greatly inflated. Perhaps this is due to Zillow "grading on a curve"; it would seem odd if one house was rated at half the value of its neighbors, so mine gets brought up to the lower end of the average range even though it doesn't deserve it. That's purely speculation on my part though.
[+] [-] mholmes680|9 years ago|reply
Its a worthless number, and they should stop trying to manipulate the market. Having a secret measurement formula that works for 70% of the houses but not the other 30% needs to either have a disclaimer that its all fantasy, or just outright be removed. I'm guesstimating those 70/30 numbers, but their site gives some locations 2 stars on their own scale: http://www.zillow.com/zestimate/#acc. If its not 4 stars, then don't publish it.
[+] [-] Finnucane|9 years ago|reply
Also, it is important to remember that no appraiser from Zillow has actually looked at your house; the data is drawn entirely from sales data, public records, and volunteered information. So there's no way it can really account for every factor, nor does it even try. And there's a lag; the market can change faster than Zillow can. It is, at best, a rough ballpark estimate of what's going on in your neighborhood.
[+] [-] leviathant|9 years ago|reply
A couple of weeks ago, the Zestimate dropped to $435,000. This would definitely be closer to an accurate value, but there's also no record of the recalculation at all in the graph.
At this point, it's basically noise.
[+] [-] jeffwilder|9 years ago|reply
[+] [-] EpicEng|9 years ago|reply
I just bought a home myself and looked this up, but the takeaway is that the Zestimate is within +- 5% 50% of the time. So, not that accurate. Are people really using it in negotiations though? I'm sure people do, but you'd have to be pretty uninformed to do so, and I'm also sure you're real estate agent would tell you exactly that up front.
[+] [-] joshuaheard|9 years ago|reply
[+] [-] baus|9 years ago|reply
What Zillow does with its Zestimate product really isn't that novel. There is a whole class of products available called AVMs (Automated Valuation Models) which are used in the industry which pre-date Zillow's Zestimates. What Zillow did which was innovative was brought this type of product to the general public, for free.
In some cases an AVM is all that is needed to secure certain types of loans such as HELOCs.
[+] [-] jotux|9 years ago|reply
[+] [-] blisterpeanuts|9 years ago|reply
[+] [-] organsnyder|9 years ago|reply
Interestingly, Zillow recently bumped up our Zestimate from $190k to $230k. What's puzzling is that they also bumped up the historical Zestimates—there isn't a big jump shown on the graph on their site (though there is a big jump shown in my Personal Capital account, which uses Zestimates as part of their net worth scores). Either they modified their algorithm in a way that affected values retroactively, or they're trying to disguise the fact that their previous Zestimates were way off.
[+] [-] cbr|9 years ago|reply
There are two things a "historical estimate" could mean:
1) What did Zillow say the value was on day X?
2) What does Zillow now think the value was on day X?
You and others seem to be thinking of (1), but I think Zillow actually is doing (2). Since the goal is to figure out what the house is worth and how its value has changed, I think (2) is actually the right metric here.
[+] [-] dvdhnt|9 years ago|reply
Probably the latter. Although, it could be that the data points are calculated on the fly or starting from some arbitrary value.
Then again, since it's shady to begin with, disguising their mistakes wouldn't surprise me.
[+] [-] ivankirigin|9 years ago|reply
[+] [-] acconrad|9 years ago|reply