Comments on: Zillow your life – it’s quite interesting http://raincityguide.com/2006/11/03/zillow-your-life-its-quite-interesting/ Seattle's Leading Resource for Real Estate Information Fri, 19 Mar 2010 05:20:19 -0700 http://wordpress.org/?v=2.8.4 hourly 1 By: geno petro http://raincityguide.com/2006/11/03/zillow-your-life-its-quite-interesting/#comment-29891 geno petro Sat, 04 Nov 2006 04:11:59 +0000 http://raincityguide.com/2006/11/03/zillow-your-life-its-quite-interesting/#comment-29891 Ardell, What you say is true. It doesnt harm anyone. It just makes the owners of the least desireable units overzealous when listing time comes around..."but according to Zillow my condo is worth..." tc, G Ardell, What you say is true. It doesnt harm anyone. It just makes the
owners of the least desireable units overzealous when listing time comes around…”but according to Zillow my condo is worth…”
tc,
G

]]> By: Michael http://raincityguide.com/2006/11/03/zillow-your-life-its-quite-interesting/#comment-29877 Michael Sat, 04 Nov 2006 03:42:54 +0000 http://raincityguide.com/2006/11/03/zillow-your-life-its-quite-interesting/#comment-29877 Firstly, The Fed through the Bureau of Labor and Statistics reports capital asset growth for residential real estate on an MSA basis for repeat sales. The data is very credible. The data is used in many studies. The data is available to anyone. Zillow discloses some information about the accuracy (or inaccuracy) of their data in the FAQs. The disclosure is probably not enough to satisfy a mathematician or statistician. For the most part Zillow is not accurate at all. Most people don't bother to research the accuracy issue on the Zillow website. In my finance classes, I poll the students. I find that less than 5% of the students know about the Zillow FAQs. But, more than 50% believe the data is inaccurate. I am guessing their opinion of the inaccuracy is probably anecdotal personal experience. While finance theory (pricing models, etc) applies to all asset classes, real estate has a few unique qualities. The uniqueness comes from the many qualitative components that can not be quantified for an equation or algorithm on such a granular level across all transactions. Zillow is attempting to report on a very granular level. Remember, the BLS reports by MSA. The qualitative components of real estate carry different influences and weight in each MSA. It is impossible to develop an algorithm(s) to accommodate all the uniqueness on such a granular level. As Zillow states on their website Zillow is a starting point. I think that is pushing it. While Zillow is interesting and I admit to using it, it is nothing more than toy. It is not a replacement for a "good" real estate professional or appraiser. A good real estate professional who knows their neighborhood for residential property should be able to price the property so that it sells at +/-3% of the list price within the average days on market. That is far more accurate than Zillow. Cheers, Michael P. Lindekugel MBA Financial Analyst RE/MAX Commercial Team Reba - RE/MAX Metro Realty, Inc Firstly, The Fed through the Bureau of Labor and Statistics reports capital asset growth for residential real estate on an MSA basis for repeat sales. The data is very credible. The data is used in many studies. The data is available to anyone.

Zillow discloses some information about the accuracy (or inaccuracy) of their data in the FAQs. The disclosure is probably not enough to satisfy a mathematician or statistician. For the most part Zillow is not accurate at all. Most people don’t bother to research the accuracy issue on the Zillow website. In my finance classes, I poll the students. I find that less than 5% of the students know about the Zillow FAQs. But, more than 50% believe the data is inaccurate. I am guessing their opinion of the inaccuracy is probably anecdotal personal experience.

While finance theory (pricing models, etc) applies to all asset classes, real estate has a few unique qualities. The uniqueness comes from the many qualitative components that can not be quantified for an equation or algorithm on such a granular level across all transactions. Zillow is attempting to report on a very granular level. Remember, the BLS reports by MSA. The qualitative components of real estate carry different influences and weight in each MSA. It is impossible to develop an algorithm(s) to accommodate all the uniqueness on such a granular level.

As Zillow states on their website Zillow is a starting point. I think that is pushing it. While Zillow is interesting and I admit to using it, it is nothing more than toy. It is not a replacement for a “good” real estate professional or appraiser. A good real estate professional who knows their neighborhood for residential property should be able to price the property so that it sells at +/-3% of the list price within the average days on market. That is far more accurate than Zillow.

Cheers,
Michael P. Lindekugel MBA
Financial Analyst
RE/MAX Commercial
Team Reba – RE/MAX Metro Realty, Inc

]]> By: ARDELL http://raincityguide.com/2006/11/03/zillow-your-life-its-quite-interesting/#comment-29874 ARDELL Sat, 04 Nov 2006 03:38:20 +0000 http://raincityguide.com/2006/11/03/zillow-your-life-its-quite-interesting/#comment-29874 Geno, Condo dwellers, in my experience, are much more turned in to the value of their condo without Zillow's assistance. Each building is like a small neighborhood where every knows what their neighbor sold for an can adjust thier own units accordingly. I don't think inaccuracies in Zillow calculations will harm condo owners. Geno,

Condo dwellers, in my experience, are much more turned in to the value of their condo without Zillow’s assistance. Each building is like a small neighborhood where every knows what their neighbor sold for an can adjust thier own units accordingly. I don’t think inaccuracies in Zillow calculations will harm condo owners.

]]> By: Geno Petro http://raincityguide.com/2006/11/03/zillow-your-life-its-quite-interesting/#comment-29781 Geno Petro Fri, 03 Nov 2006 23:29:49 +0000 http://raincityguide.com/2006/11/03/zillow-your-life-its-quite-interesting/#comment-29781 Interesting how Zillow is being received in different areas of the country. On the northside of Chicago, where the majority of housing stock are condos (including a couple hundred highrises), their numbers are pretty far off the mark more often or not--just too many upgrade variables between otherwise seemingly similar units are in play--and the new feature they added to allow the owners to "upgrade" their value only adds to the inaccuracies. And what isnt a condo, or new const, is teardown-- which, as you well know, is another whole tangled up ball of string to try and unravel! Appraisers here are always calling the agents here for help. Interesting how Zillow is being received in different areas of the country. On the northside of Chicago, where the majority of housing stock are condos (including a couple hundred highrises), their numbers are pretty far off the mark more often or not–just too many upgrade
variables between otherwise seemingly similar units are in play–and the new feature they added to allow the owners to “upgrade” their value only adds to the inaccuracies. And what isnt a condo, or new const, is teardown– which, as you well know, is another whole tangled up ball of string to try and unravel! Appraisers here are always calling the agents here for help.

]]> By: ARDELL http://raincityguide.com/2006/11/03/zillow-your-life-its-quite-interesting/#comment-29774 ARDELL Fri, 03 Nov 2006 23:15:29 +0000 http://raincityguide.com/2006/11/03/zillow-your-life-its-quite-interesting/#comment-29774 What a difference that 3 miles makes though Dan! That's where my Mom WANTED my Dad to buy...it's worth $685,000 vs. $15,000 today :-) Thanks for proving my point that three miles CAN make a HUGE difference. The difference back then was $7,000 vs. $15,000, today the $7,000 is worth $15,000 and the $15,000 is worth $685,000. Maybe the house she wanted in Merion is only worth $550,000 today...but clearly my Mom had a better brain for real estate than my Dad. He just wanted to live near his Mom and own a record store. What a difference that 3 miles makes though Dan! That’s where my Mom WANTED my Dad to buy…it’s worth $685,000 vs. $15,000 today :-)

Thanks for proving my point that three miles CAN make a HUGE difference. The difference back then was $7,000 vs. $15,000, today the $7,000 is worth $15,000 and the $15,000 is worth $685,000. Maybe the house she wanted in Merion is only worth $550,000 today…but clearly my Mom had a better brain for real estate than my Dad. He just wanted to live near his Mom and own a record store.

]]> By: Dan Green http://raincityguide.com/2006/11/03/zillow-your-life-its-quite-interesting/#comment-29773 Dan Green Fri, 03 Nov 2006 23:06:31 +0000 http://raincityguide.com/2006/11/03/zillow-your-life-its-quite-interesting/#comment-29773 I grew up 3 miles away...! http://maps.google.com/maps?daddr=4950+Lancaster+Ave,+Philadelphia,+PA+19131&saddr=350+Winding+Way,+Merion,+PA++19066&f=li&hl=en&ie=UTF8&z=14&om=1 I grew up 3 miles away…!

http://maps.google.com/maps?daddr=4950+Lancaster+Ave,+Philadelphia,+PA+19131&saddr=350+Winding+Way,+Merion,+PA++19066&f=li&hl=en&ie=UTF8&z=14&om=1

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