Funny, my stats professor just sent me this this morning. I think one’s perspective on the Zestimate’s “within 5% of median selling price” claim depends on how impressive or not you think the tool is. In my eyes, it’s kind of a miracle, especially considering how difficult it is to compare any two houses even if they’re in the same neighborhood and similar square footage, features, etc. There’s just so much variance. Furthermore, the Zestimate has to always somewhat trail selling prices, due to changes in preferences that even experienced realtors have difficulty predicting, let alone excel spreadsheets. But I think the plaintiff is partly right—everyone uses Zillow to gauge prices. Shit, it's their business model. So Zillow's claim that the suit is without merit is wanting it both ways, but of course they'd say that in the face of a potential class-action.
One's perspective is more easily shaped by how much of a lie you think that claim is. Here's a friend's house. Amazingly, it's been through three sales since they got out of it but hey, that's Playa Del Rey. Even more impressive are that the pictures are from 2015. Zillow: $514k, despite the fact that it sold less than eight weeks ago for $508k. That's within 1% - but that's the tool AFTER THE FACT. Or is it? Remax: $530k. Realtor.com: $568k. Realtor.com smokes crack. Redfin? Redfin puts it at $523k. Redfin also lists sales, but doesn't list the last two - which explains why the pictures are from 2015. Realtor.com lists those same sales. Normally you can look this stuff up on the county assessor's site but Los Angeles County charges for access because of course they do. but there's every evidence that Zillow is straight-up making up sales. Not only that, they know you're a buyer, not a seller (because your zip code is nowhere near where you're looking) so it's lowballing. When I look up my own house Zillow is suddenly $10k higher than Redfin. In my eyes, there are 50-odd houses within a quarter mile of me that are one of three plans. There are record of every equity-backed home improvement loan for each one of them. There are publicly available sales records and there are publicly available assessments (which, around here, come in at less than half what the real estate sites estimate for sales). Redfin and Zillow differ by $10k on how much my house is worth - that's a kitchen remodel. And it doesn't really matter whether I've replaced my storm windows or polished my hardwood - my price is set by other similar properties and in that aggregate, there's a normal distribution. It's just data. The difference is, Zillow manipulates theirs. This is simply not true. The Zestimate will trail selling prices to buyers and lead selling prices to sellers because they want to get people selling stuff. Also mentioned in the article is the fact that 2/3rds of Zillow's business is advertising to real estate agents - they're not working for you. They're working for the people trying to buy or sell your home for you. It has been my experience that people use Zillow to gauge prices in markets where there is only Zillow. Anyone who looks at it for any amount of time determines that they're liars and crack smokers. I'm keenly interested about shit like sales-to-list ratios - that's what indicated the market was cresting last time. Zillow actively fabricates that data.I think one’s perspective on the Zestimate’s “within 5% of median selling price” claim depends on how impressive or not you think the tool is.
In my eyes, it’s kind of a miracle, especially considering how difficult it is to compare any two houses even if they’re in the same neighborhood and similar square footage, features, etc.
Furthermore, the Zestimate has to always somewhat trail selling prices, due to changes in preferences that even experienced realtors have difficulty predicting, let alone excel spreadsheets.
But I think the plaintiff is partly right—everyone uses Zillow to gauge prices.
As someone who probably compares four or five homes' closing prices with their Redfin estimates every week, the litigant is correct: Zillow is a crack smoker. Something they don't tell you in the article is that the "Zestimate" bounces around a lot - whatever their proprietary blend of herbs and prices is, it's a lot more variable than the market would indicate. https://www.redfin.com/blog/2017/02/redfin-estimate-accuracy.html 20 percent is more than the amount being litigated over. That said, appraisals are official legal tools used for assessing property taxes and equity for mortgages and such, not informal tools for market pricing. I suspect this suit will be dismissed on merit.Zestimates are within 5 percent of the sale price 53.9 percent of the time, within 10 percent 75.6 percent of the time and within 20 percent 89.7 percent of the time, Zillow claims.