The life and times of an Arizona Investor

This will be my personal journal to document my failures and successes during my real estate experiences in Arizona. All stories, thoughts, and successes will be documented..

Saturday, August 05, 2006

New Comments about Zillow.com

If you've been in real estate for awhile, I'm sure you've heard of www.zillow.com.

I critically analyzed this site again for several hours and am happy to report that www.Zillow.com is getting much better in predicting real estate comps.

Early this year, I checked this site and it was apparent that their algorithms were not accurate in Pima county (Tucson). The root cause for their errors may have been coming from the projection of values based on super high appreciation rates. Last year, Tucson appreciated over 20%.

The values have come down approximately 40% in the last 6 months and am very surprised that values are spot on for all of my properties. Of course real estate did not come down 40% , but its probably zillow's best way to correct the graphs. For some properties, I needed to update the proper square footage because the values in the assessor's records are not accurate.

This site is good because you can find comps that sold only a month ago. Thats fabulous, last year, I paid www.dataquick.com several dollars for one search for the same service.

Good investing,

Bginvestor
|| Bginvestor, 9:18 PM

9 Comments:

David G here from Zillow.com
Thanks for the review - Zestimates can only get more accurate as we collect more data - I'm glad that's what you see in your analysis.
The graphs reflect changes in our Zestimate. In the interests of transparency and accuracy we don't go back and retroactively "fix" old Zestimates - even if we were too high - which should explain the 40% drop.
Blogger David Gibbons, at 9:14 AM  
I wish that someone could accurately produce comps for my specific area (central Texas - Austin). Being that Texas is a non-disclosure state, about the only accurate way to get comps is to go through a RE agent or appraisar. I have yet to see ANY online service - be it paid or free - that will give accurate comp values for my area.
Blogger Steve, at 6:21 AM  
BTW - Here are two examples of Zillow.com values. The first is for my personal residence. Zillow.com's Zestimate says "None available", and the only value given is for the "Tax assessed value" (which, btw, is from a year ago) for $185,000. The actual value of the property is $205-210k. The second property is the same thing, except the value returned was $136k when the FMV is actually $140-142k. Close, but definately not close enough to be reliable just yet. I'm not faulting Zillow.com at all - (at least they give SOME value) - it's just the fact that sold data is monopolized by housing professionals only.

B - Sorry to hijack your thread. ;-)
Blogger Steve, at 6:26 AM  
I always wondered where they came up with the name "zillow" and, as I was reading Dr. Seuss' "There's A Wocket In My Pocket" to my daughter last night before bed, the last line jumped out at me: "But the zillow on my pillow always helps me fall asleep."
Blogger Shaun, at 8:14 AM  
David G from Zillow.com again,

Steve 1,
Have you considered writing your congressman? Seriously - NYC just free'd a whole bunch of sales data and I think that there's a case to be made that not providing transparency in property sales actually negatively impacts property values.

Steve 2,
We don't have enough data to create a Zestimate for all the homes in our database - yet (there's more on this topic on Zillowblog) - so, rather than take a wild guess, we list the most recent tax assessed value that we have for the property.

The 3% variance in the other Zestimate you mention is close to as good as you can get without physically visiting the house - remember that your Zestimate is a starting point in determining FMV, and doesn't replace the appraisal you'd receive from a local market expert who has visited the house and its comps.

Shaun,
The actual origin of "Zillow" is explained on the "About Us" page of the website.
Blogger David Gibbons, at 11:33 AM  
B - Sorry again for hijacking your thread. David doesn't seem to have a public profile, so I have to respond to him here.

David - I agree. I've written my congressman more times in the past year than in all years before that combined, due to the horrid legslation on the books and those recently passed (especially, the L/O law last year). Unless I have $50k+ to give to their campaign, I'm just a speck of sand between their toes. :-(

I read this article which pretty much spells it out, particularly the following:

While data on more than 65 million homes is available, some states--such as Indiana, Texas and Louisiana--are left out entirely due to nondisclosure laws

So people like me in Texas are screwed. I'm in the process of joining our state REI association, though, which should give us more clout in combating future legislation.
Blogger Steve, at 6:57 AM  
Thanks for your input, David. I've also been pretty disappointed in Zillow for my area of Oklahoma. But, I know it will get better eventually. Unfortunately, I'm in the process of selling several properties, and can only hope any potential buyer won't be misled by Zillow (or the current Yahoo real estate which now uses Zillow--the old Yahoo was much more accurate) when they want to check any house value.

I'm going to use Domania.com's home price check, which gives the recent sales prices of the surrounding houses. They match the appraised values we've received.

Does anybody else know of a good, accurate way to figure comp's online?
Blogger Trisha#1, at 11:06 PM  
Trisha - I'm not sure about good or accurate (because nothing is for my area), but you may try these to see if they work:

http://www.ditech.com
(click "Free Home Appraisal")

http://www.bankofamerica.com
(click "Searching for a home" and then "Estimate the value of your home")
Blogger Steve, at 7:58 AM  
THANK YOU, Steve! The Ditech one kept returning this error: "Failure. No Avm Succeeded." But, the Bank of America one worked great!
Blogger Trisha#1, at 12:05 PM  

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