And if Redfin’s trip to SoCal wasn’t enough of a distraction today, Zillow issued their Quarterly Home Value reports for 2006. Alas, so much “material” and so little time.
You can see their “Zindex’s” for 75 metro area both on their website and at their blog. I begin by stating the obvious; their median “home values” are based on their own Zestimates, which agents largely agree are (sometimes significantly) flawed. Like a bad wreck, I had to look however.
Surprisingly, Zillow’s quarter-over-quarter and year-over-year numbers for San Diego and its various neighborhoods are not far off compared to recorded sale price changes. I guess when you are talking averages, you can be consistently bad or consistently good, so long as you are consistent.
Edited to add a thank you to Amanda Hoffman at Zillow for sending me the links to the info this morning. They have put together a staggering amount of statistical data which I admittedly haven’t had time to give more than a cursory glance yet.
Kevin Boer says:
Not to be pedantic, but I don’t think you mean, “…you can be consistently bad or consistently good, so long as you are consistent.”
What’s important for their median Zestimate to be close to actual sales medians is simply that their Zestimates are neither consistently above nor consistently below the actual value, but rather spread between the two.
Unless I’m misunderstanding your point?
February 8, 2007 — 2:59 pm
Kris Berg says:
Kevin,
The whole “consistently bad” remark was intended to be more flippant-tongue-in-cheek. But since you brought it up…
Well, not exactly. I was comparing % difference in median value (Zillow) to % difference in median sale price (recorded sales). Without killing my few remaining brain cells this morning, I suppose you could achieve a more or less correct “difference” by being a)Always right; b)having a median that is always right (your example); c)always be low; d)always being high; or, e)always being lucky.
You may just be the first person to ever accuse me of thinking too hard. 🙂 In any event, it is a lot of well intended data which seemed to work out for San Diego. How did they do for the Bay Area?
February 8, 2007 — 4:25 pm
Andrew Maury says:
Exactly what I was thinking, Kevin.
February 8, 2007 — 4:26 pm
Kris Berg says:
Okay, now that makes two people. 🙂 Three makes a party. This just from Amanda at Zillow:
So we have a quorum. Kris’ logic skills are underdeveloped. 🙂
February 8, 2007 — 4:35 pm
Dave Barnes says:
I still think Zillow is very flawed. So flawed as to be useless crap.
As a homeowner, I did what any homeowner would do; I checked my own neighborhood.
Zillow shows that the YOY increase in price for Denver: Belcaro was 16%.
Well, it is not.
Here is the problem.
Houses built in the 1920s-60s are being sold for $500K. Scraped and replaced with McMansions selling for $1.2M+.
Now, in greater Denver this scrape and replace is not statistically significant. But, in my neighborhood of a 200+ houses, it is very significant.
So, the median (or mean, I don’t care which) shows a huge increase, but the INVENTORY is not the same!
February 8, 2007 — 5:46 pm
David G from Zillow.com says:
Dave –
We analyzed 1191 homes in Belcaro. The point & radius process used to select those homes into the sample is described on the first page of the report.
As you can read on our blog, we decided to release our raw underlying data this quarter so that local experts like yourself can interpret and explain the numbers in their local markets. Your comment is exactly the type of “local flavor” we had in mind (sans the piece about “useless crap”, of course).
Remember that we are just reporting “what” happened — the median home in Belcaro is worth 16% more than a year ago and it seems you agree — but only a local expert like yourself knows “why” — it was because of the massive investment into local property upgrades.
If anything, your explanation explains the appreciation we measured in Belcaro and doing so, you’ve demonstrated your expertise. I think that’s useful, don’t you? It’s a great example of the potential for a productive partnership between Realtors and Zillow.
February 9, 2007 — 3:37 pm