The controversy continues with Zillow's Zestimate's vs. local agent's pricing accuracy. I've read lots of interesting stuff on this site as well as Sellsius and others in regards to Zillow's ultimate plans. Are they going to become a national MLS? Should we Realtors be using their tools to enter other homes for sale? How will the Zillow model impact the real estate industry in general?
I don't know. I have no idea what Zillow's ultimate plans are. Don't know if other Realtors should be entering listings of their peers. I do know that this industry is crying out for change. I do know that almost every one of my potential clients eventually mentions Zillow. Most of them enjoy the idea of looking at their home prices and those of their neighbors. They also seem to understand that Zillow's is not the final word when it comes to pricing.
I've got a friend from Texas who would sum up the consumers this way: these folks like the dog food and they're hungry for more.
The bottom line is that our customers are visiting Zillow and we need to be able to discuss this topic in a rational, fact-based way.
Here are the facts for Boulder real estate sales in the month of March, 2007. Once again I've compared the Zestimate to the listing agent's pricing.
If you want to see the spreadsheet it's right here.
The results are:
Zillow's Zestimates are within 5% of the sales price 60% of the time, and within 10% of the sales price 70% of the time.
Agents score within 5% of the sales price 90% of the time, and within 10% of the sales price 90% of the time.
Were they WAY off on any properties?
Yes, on 560 S. 44th Street, Boulder 80303 Zillow was off by some 16% over the sales price. I looked at Zillow's details page compared to the MLS data sheet and found a huge item: Zillow's stats show that the property has 3 acres, while the info in the MLS shows that the property sold with less than 1/4 of an acre (.25). That's kind of big and seems to fit the themes in my earlier findings. Namely, that when there is some huge piece of information missing or inaccurate in the public data that Zillow uses, then the Zestimates are way off.
Now, you may be saying, "duhh, Bob". But we need to keep in mind the fact that Zillow is not pulling these Zestimate out of their #$%'s, they are simply based on formulas. Garbage in, garbage out. Good in, good out. See?
According to Zillow's Data Coverage and Zestimate Accuracy, the accuracy for staying within 10% of the sales price in Boulder is 78%. They are off here by only 8% even with that glaring overage of 16% on the above property.
Given their current drive to get home owners to correct misreported facts, it seems that a more accurate Zestimate is just around the corner. All you have to do is look at the above numbers and assume that someone corrected the acreage discrepancy from3 acres to .25 acres. I'm quite certain that would have had an impact.
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