Laguna Niguel Real Estate Blog

We have written a lot of posts on zillow, and read a lot of posts, but your title is the best I've seen.

Thanks. I think that this comment was a result of frustration.

Zillow may not have the greatest "Zestimates", but what do you think about Zillow becoming a National MLS? I read an excellent analysis of the mess in the MLS arena in the new 2007 Swanepoel Trends Report. Just curious what your opinion is?

Hi Lucy,

I really don't care who stores the MLS Data. Zillow seems like they can handle databases really well, and that is all an MLS is, - a big database.

The problem comes with the interpretation of the data stored in the database (or MLS). Zillow encourages people to interpret the sales data themselves and come up with misguided conclusions.

Even the most savvy buyer or seller, armed with MLS data will not match a Realtor who is seeing houses EVERY DAY.

I don't think that the MLS data needs to be "secret", however it is reckless and irresponsible to put the data out there and not provide an explanation as to what it means, or how to interpret it.

Zillow currently encourages folks to "make up their own mind" given some stats, and that isn't helping educate consumers with an accurate view of the market conditions. There are other factors to consider that just can't be summed up with numbers pulled from a database.

In other words, the MLS data needs a context. Real Estate agents provide that context with skills in interpreting the data as it relates to the market cycle.

Hi Rory, it's David from Zillow - sorry that I never found this post sooner.

In fact, the WSJ's findings largely confirmed the Zestimate accuracy we've measured and publish on Zillow (the link's in the search box on our home page). I encourage Realtors to know their local Zestimate accuracy and data coverage -- in Orange County, 70% of Zestimates are within 10% of sale value and median error is 5.6%. Below the Zestimate, Zillow publishes a "Value Range" -- another clue that the Zestimate is a starting point, useful for researching house values. We clearly explain on the site that a Zestimate value is not an appraisal and is not a substitute for a CMA. Zestimate accuracy will improve but it does not replace the informed opinion of a local expert who has visited the house.

So, I can't agree with you that anyone has been harmed by their Zestimate value -- some are certainly surprised and even upset, but not harmed. On the other hand, I am certain that access to Zestimate values and related data has made many real estate consumers smarter -- I've heard that feedback from their Realtors. Yes, I have heard that both buyers and sellers now quote Zestimate values in negotiations from time to time -- but that's all that those conversations are; negotiations -- and as you know, negotiation is not new to the real estate game.

Hi David,

Thanks for leaving a comment. I have to say that I'm conflicted with encouraging clients to use Zillow or not.

Take for example, Laguna Niguel, 92677, I imagine that Zillow is getting more and more accurate with Zestimates as time goes by. Why? Because the homes there are largely based on predictable floorplans, there is tons of reliable data, and lots of turnover to keep the data on target.

For Laguna Beach on the other hand, no two homes are the same. Values can vary drastically based on view, age, and locale. This is a place where a few feet can literally translate to SEVERAL Million dollars in the difference of a sale price, and consequently a listing price. I'm guessing that this area falls outside of the 70% of Zestimates, as a matter of fact, I can practically guarantee it. This is an area where there is little room for error because of the magnitude involved.

To be completely neutral on the whole thing: Zestimates add an ingredient to the client counseling process that didn't previously exist. Depending on the location and other factors here in Orange County, that ingredient is more or less relevant as the factors change.

What helps me, as a Real Estate Agent support Zillow, is just being able to explain how and if that ingredient is relevant.

The real problem or harm comes from a potential home seller getting a false impression from their home's potential value after using Zillow.

It would be nice if Zillow had a widget that an agent could use on their website along with the API, where the agent could chime in their opinion of using the "Zestimate" ingredient, something along the lines of "Rory says... Zillow's Zestimates can be helpful in this city because of these factors..."

Sorry for the long response, but I'd rather incorporate Zillow into my site, and have it be an option for my client to use, but I don't want to deal with any unfavorable results. That's why I'm still a bit frustrated.

I recognize that Zillow's own PR and information has done a lot to clarify this for my client base, however.