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Free Money Finance

Zillow's Numbers Not What You Think

Posted: 15 Aug 2016 02:05 AM PDT

I was reading a local newspaper (one of those half-page jobs you get for free in the mail) the other night and an article about Zillow caught my attention.

In particular, here's a quote that got my attention:

When questioned about the reliability and accuracy of information available [on the site], the CEO of Zillow made a statement last year that "while Zestimates are a good starting point, nationwide Zestimates have a 'median error rate' of about 8 percent."

Uh, yeah.

First of all, I've noticed this as well. It always seems that any house I own is vastly under-priced on Zillow and when I want to buy and look up the home it's always vastly over-priced. Ugh!

Second, price updates are very sporadic. I remember living in my last house for a year before I saw my purchase reflected in Zillow.

Third, 8 percent!!! Yikes!!! A $500k house could be on Zillow for $540k or $460k -- and that's just the median! It could be worse!!

Finally, the article says the primary purpose for Zillow is a lead generation tool for real estate agents (which I figured, but it was nice it was confirmed).

Ok, I didn't really mean for this post to be a rant against Zillow. The article just confirmed some things I had been wondering about and I thought I'd share them.

Any big Zillow users out there?


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