San Carlos Real Estate Agent, San Carlos Realtor Why Zillow is a “No-Go” in San Carlos. | The White Oaks Blog
San Carlos Real Estate January 25, 2008

Why Zillow is a “No-Go” in San Carlos.

by Chuck Gillooley

Zillow.com is a popular website for many potential home buyers and sellers. And why not? For buyers, it utilizes a cool Google-like satellite-hybrid map that allows you to search cities or particular neighborhoods for homes that are for sale. It even puts together comparable sales data for specific home sizes. For sellers, you can use the very popular “Zestimates” feature to give you an estimate of what your home is worth. Sounds great, right? It is, except for one minor detail — the accuracy of the information you get out of this site is questionable at best.

Allow me to explain. First, from my days as an engineer, we abided by the GIGO (Garbage-In, Garbage Out) Law. This “law” simple states that no matter how solid your algorithm is, if you plug garbage data into it, you’re going to get garbage data out. It’s obviously a little tongue-in-cheek, but it really applies here.

Let me provide you with a live example to prove my point. Saint Francis Way is a very nice street in White Oaks — lots of nice homes, great schools, everyone wants to live there. I punch up Saint Francis Way on Zillow, and bingo! I am thrilled to see that there are no fewer than 3 homes for sale right now on the most desirable blocks — Eureka! Pack the bags, honey!

Those addresses on Saint Francis that show “for sale”in Zillow are:

  • 1972 – 3BR/2BA $1,249,000
  • 1924 – 3BR/2BA $1,198,000
  • 2424 – 3BR/1BA $949,00

Good so far? But here’s the problem — not one of these homes is actually for sale. Here’s the real status of the three:

  • 1972 – Sold on 11/15/07 for $1,235,000. (2+ month-old data)
  • 1924 – Sold on 12/29/07 for $1,175,000 (1 month-old data)
  • 2424 — Pending sale since 1/15/08. (2 week old-data)

You can repeat this exercise on Howard Ave, Eaton Ave, and other streets in San Carlos, and you’ll get similar results. Am I just being nit-picky on details? Maybe…but if you now take this data above and try to do something useful with it, like running comps or estimating what your home might be worth, you can see where the wheels fall off this wagon very quickly. Data that hasn’t been updated in two months is useless in a real estate market as dynamic as San Carlos.

Why doesn’t Zillow have accurate or updated info? I don’t know — it’s all readily available data. But what I do know is that if you plug garbage in…well, you get the idea.
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Comments 8
  • Hey, it’s Drew from Zillow. Let’s start with some context. Zillow is an online real estate community, where everyone is encouraged to contribute. We give everyone the opportunity to participate on Zillow and feel that the free flow of information is better for everyone. We have designed the site to identify who is making contributions (traceable back to the profile for the user who has contributed). We also give particular prominence and credit to home owners and listing agents, so users can see when information is provided by these individuals, who have first- hand knowledge about their properties. The homes you mentioned were “reported for sale” by a member of the zillow community. The listing agent or home owner can always take over the listing and advertise it as their own (and that is preferred by us). Since you knew the sale price and date, please also note that, if you wanted, you could report those homes mentioned as sold by clicking the “edit status” link next to the list price — that would help lead to a more accurate dataset.

    We are also going to start allowing agents/brokers to get permanent attribution on the home details page of the homes they’ve sold (we’re calling it the virtual sold program) — which we think benefits both the agent/broker and people who want to find out which agents are selling houses in the area(s) they are interested in. You can learn more about our Virtual Sold Sign program here.

    Hope this helps.

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  • Hi Drew,

    Thanks for checking in, and for providing the explanation. I think the problem I have (as well as many users on Zillow) is that they don’t understand the “user-driven” emphasis of the site, and will consequently take data from the site as gospel. Most real estate websites traditionally pull their data from the MLS and/or county records. Therefore, the info from one site is as accurate as any another. I believe you pull your data from the same sources?

    So when this data is taken out of it’s original intended context and used to establish sales prices and home values, I question the validity of the results. I will grant you this — in many communities and in San Carlos especially, the square footage that is pulled from county data is often incorrect — so your sites ability for users to correct this information is a plus.

    Chuck

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  • Nice post and good discussion. Chuck, I don’t take Zillow’s data as gospel but rather with a grain of salt. I understand that the data are not all perfect.

    Nonetheless, I really like the site and as a consumer you should give me more credit than you do. I understand the user-driven emphasis of the site, and I always cross reference the homes I see listed as for sale on Zillow with other sites such as Movoto or just plain MLS listings. In fact, for a while I was using Zillow before they even offered for sale info — for a data nerd like me I like the interface, I love the graphs, I like seeing historical sale data (I have to imagine that the 5yr and 10yr data come from the counties, so in counties in which such records are available I imagine these data are somewhat accurate), I like seeing the Zestimate and have to imagine realtors do too because more often than not, the home’s listing price falls within the Zestimate’s range. This either means they are using the Zestimate to guide them/the homeowner/seller, or the Zestimate is at least somewhat accurate. (Though I have also seen Zestimates be WAYYYY off, to be fair.) I don’t know if the Zillow guys hope to one day have all the online realestate traffic but they are not there yet. In any case I think of it as just a tool among a lot of tools, including a good agent, to help inform me as a homebuyer.

    (Also, there was a great discussion you probably heard yesterday on this very topic on KQED’s Forum. I listened while stuck in traffic!!)

    M

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  • Hi Mina,

    Thanks for your very insightful comments on Zillow. You made some excellent points that I’d like to comment on.

    First, I agree with you that Zillow’s user interface is great. They (as well as Movoto and a few others) have done a great job adding powerful and user-friendly tools to an industry sorely in need of it. You’ve used MLS Listings, so you know what I’m talking about 🙂 They do a good job of enabling users to see whole neighborhoods at one time (from the air or via a map) and, as you stated above, they chart historical data pretty well.

    The problem that arises for me as an agent is that when I’m discussing pricing with buyers or sellers I invariably hear “Well, Zillow says the home is worth XYZ…” and that number turns out to be WAY off (which happens quite often,) we end up debating the merits of a datapoint that is essentially irrelevant. The example I cited in the blog is just one of many I have encountered.

    I have no problem at all with the theory of providing Zestimates. Frankly, a good agent is essentially doing the same calculations when he provides you with a comparable market analysis. The problem I have is that it’s obvious the data that’s being used in Zillow’s Zestimates is is not correct (for many reasons,) and for the unaware user this can distort the true market value of a property. You simply cannot underestimate the impact of the printed word, especially when it involves pricing.

    Thanks again for your excellent post!

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  • Okay, I am getting mixed signals reading the blogs on Zillow.Com and the validity of the site. I am putting my house on the market and the agent said the going price for my neighborhood and nearby neighborhoods with my similar home are $10k less than what Zillow says. Do I shoot somewhere in between when setting the asking price?

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  • Hi Teri,

    That’s a very good question. Without knowing what home or neighborhood you’re selling in, I’ll make a couple of assumptions. The first of which is that your agent provided you with a comprehensive Comparative Market Anaysis (CMA) from which he/she derived the suggested list price for your home. In this report, you should have at least 10-12 examples of active listings and homes that were sold that are comparable to yours. The second assumption is that you’re working with a local agent who knows your neighborhood well.

    If these assumptions are correct, I’d put more credence in your agents opinion — for several good reasons:
    — Accuracy of data. Zillow freely admits that their data is very “user driven” and acknowledges that they don’t get real-time MLS updates on closed sales (See their comments to this post.)
    — Trends. Websites take static snapshots of neighborhoods. A good agent can feel which way trends are going based upon how fast or slow similar homes are selling.
    — Intangibles. Things that may make your home more or less desirable (condition, location) are not usually tracked on a website.

    That being said, the fact that Zillow’s estimate and your agent’s estimate is only $10k apart is pretty impressive. If your agent has done a good job with the comps, then kudos to Zillow for being so close.

    I hope this helps.

    Chuck

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  • Do you believe Zillow data is still a “no-go” in San Carlos? Figured this would be an interesting topic to update, especially given Zillow’s recent IPO.

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    • Hi Andy,

      That’s a good question, and from my perspective the answer is “yes” — it’s still a no-go. But it’s nothing against Zillow specifically. That sentiment applies to any automated property valuation software that’s out there — back when I wrote this post, Zillow was the only noteworthy solution out there, but there are now others. The fundamental problem still exists that these valuation algorithms do not take into account important subjective criteria such as property condition, floorplan, upgrades, school districts, and even the street location. Just those factors alone can cause a huge swing in home value in San Carlos. I tend to check these valuations fairly often and find them all over the map — both absurdly high or low, which further cements my belief that they still don’t have it dialed in yet.

      On the IPO question, the whole social media IPO frenzy has me a little puzzled. Many of these companies don’t seem to have a steady or diverse revenue stream. Zillow relies heavily on Realtors forking over money for ads — that is not a reliable revenue stream. It seems like we’re back in 2000 again when if you had “.com” in your company name, you were guaranteed a hot IPO. Now it’s “social media” instead of “.com”, and it makes me wonder if we learned our lesson the first time?

      CG

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