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Correlation does not imply causation, and Redfin isn't off by $5k nearly as much as Zillow - I know, I follow about six dozen homes at a time. What's hilarious is their blog links to their press release and their press release links to their blog.
Can't explain why your estimates are wrong? Use phrenology and marketing!
I got asked to write a rent/price estimator, though not one for use by consumers, back ~2011 or so. I refused because I couldn't spend more than a month on it, it's a harder problem than "I know some statistics and I have a month", and it was so going to come back to bite us. There were shouting matches. You have no idea how satisfying forwarding every post I come across on the Zillow lawsuit to my old boss is.
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Redfin just spelunks the MLS and reiterates. The minute it sees a bidding war or an encumbrance it shits the bed, as is appropriate. They also define "accurate" in a truly broad way: "We're within 3% two thirds of the time." So. For that one in three house that doesn't conform to the maxims of the MLS, they can be off $150k no problem. I also think their algorithm favors "asking price" more than anything else and is just cranking through to see whether offers are lower or higher per zip code/territory. I'm watching one property whose price dropped from $495k to $245k when it was revealed that the hillside it was on was about to fall into the ocean and it'd take heinous amounts of civil engineering to return the house to a livable state. Redfin merrily put an estimate within 3% of both prices and didn't bat an eye. Zillow thinks it's about "blue doors."
user-inactivated · 627 days ago · link ·
The wife and I found the most amazing home the other month. It checked off almost all of our boxes. The house was in amazing shape for the price. The neighborhood was nice and quiet and a decent distance from work. It was big enough to hold all of our stuff but small enough to easily maintain and cheaply heat. There was a fenced in yard for the dog, plenty of street parking for friends, and it happened to be in the one spot of the city where adverse weather never happens. We passed up on it though, because the kitchen was a modern black and white and we wouldn't have enough money to remodel it for a few years. I have my heart set on blue. Nothing else will do. Seriously. People are fucking picky over the dumbest shit but even I find this hard to believe and I once checked the ceiling because someone told me the janitor wrote the word "gullible" on it in Sharpie.
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If you read any behavioral economics it'll reinforce the notion that subconsciously you evaluate a lot of variables and then pick one or two to blame it on. It'll also tell you that as humans, we pretty much go with our guts and then rationalize the logical reasons. Don't buy in this market unless you have to.
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user-inactivated · 626 days ago · link ·
I don't think the market is even giving me an option. The only two ways we're getting a house around here is if we fall backwards into a pile of money or if we're willing to buy a house that is cancer in physical form. The market here sucks now in that our options are fewer and fewer and they're going faster and faster. It's pretty fucking stupid.Don't buy in this market unless you have to.