Zillow.com

Realty Reality: Zillow.com Provides Real Estate Valuations
by Bob Hunt
Realty Times - 03/02/06


Have you Zillowed your home lately? Or your neighbors' homes? Or those of your friends? If not, you might want to try it. It's kind of fun, it's fast, and it's easy to do. Moreover, it's free.

"To Zillow" is somewhat akin to "to Google"; and while Zillowing is not an activity whose name has worked its way into everyday language, it's likely to. Zillow.com is a new real estate valuation website.

"Want to know the value of your home (or someone else's) home"? Go to Zillow.com and simply type in the address." And who doesn't want to know home values?

Now, real estate valuation websites are nothing new. A variety of them have been around for years. Many have already gone defunct, or have been folded into some other site. But Zillow.com has a few unusual things going for it.

On the consumer side it is not only "friendly" and easy to use, but also it has no registration requirements and it is free. On the business side, its founder is Rich Barton, the creator of the popular travel site Expedia.com. Additionally, Zillow.com has garnered more than $32 million dollars from venture capital and private sources. It should have some staying power.

A consumer who goes to this site needs only to type in an address to receive, literally within seconds, a price valuation a bit too-cutely called a "Zestimate." Not only is there a price valuation for the property in question, but price values for homes in the surrounding neighborhood are given as well. Comparable sales data are provided also. Charts display value trends for the individual home and the zip code area for periods of one, five, and ten years.

Zillow has data on more than 60 million homes in the U.S. -- not all of them, but quite a few. According to company spokesmen, its data is more solid in markets where more homes have been sold in recent years. "All along the West Coast it was really good," said Amy Bohutinsky of Zillow.com.

The big questions, of course, are, "How good are the 'zestimates'?" "Are they reliable?" The answer to the latter question is simply, 'no'. To the first, it depends on what standards you want to set.

In all fairness, Zillow.com is currently in what they call the beta stage. It's definitely a work in progress. The company has been quoted as saying that its "estimates are typically on target, falling within 10 percent of the actual home-sale prices 62 percent of the time." For a $900,000 house, that could mean valuing it from $810,000 to $990,000. Is that good? You tell me.

In my own toying around on Zillow.com I came up with mixed results. It appeared, generally, to get neighborhood price ranges pretty well, but results often became anomalous when specific properties were picked. Like most valuation programs, it doesn't seem to know which side of the street has the ocean view, and it doesn't, therefore, account for that appropriately. Also, it seems to favor, price-wise, homes that have recently sold or been refinanced over those that haven't. Otherwise, there is no accounting for the fact that it would yield widely different valuations for model matches within just a few lots of each other, and with similar views or non-views.

One of the interesting features of Zillow.com is that it allows an inquirer to "refine" the valuation by entering information that may not be in the database (such as remodeling activity) or that the data base has wrong. Again, though, anomalous results occur. Twice I entered corrections showing that a particular property actually had an additional bedroom and more square footage than was shown in the Zillow data base. In both instances, though, that resulted in a significantly lower valuation. Go figure.

So, no, you don't want to bank too heavily on the accuracy of a Zestimate; but you still might want to Zillow your house, or someone else's. Just for fun.

Published: March 2, 2006