Zillow.com is online now. This is the much anticipated real estate website launched by the guy who started Expedia.com, which changed the travel industry (80% of all travel is now booked online).
Zillow lets you:
• Instantly get valuations for over 40 million homes in the U.S.
• See historical sales and comps of nearby homes
• Refine the valuation estimate for a home
• Determine how future remodeling can impact resale value
I took it for a spin and the results were mixed.
I started by running a valuation on a couple of our listings, and was surprised at how close Zillow placed the valuation to our list price. “Wow”, I thought, “this is pretty cool”. Then I ran a valuation on my own home, and the value came up about $30K to $40 short, but that may be due to the fact that the appraisal district has our home undersized in its records by about 800 sqft (shhh, I don’t want my taxes going up!), or it could be that, like many proud homeowners, I probably have an unrealistic opinion of my home’s value.
After running a whole bunch of valuations, my initial verdict is that the Austin home valuations provided by Zillow are hit and miss. Some are off by $100K and more. Others, mainly in lower priced homogenous neighborhoods, are almost dead on accurate.
Our previous home, which we sold a year ago for $240K, shows up in Zillow at $153K. Two houses we own in a tract neighborhood in Leander come up at pretty much the exact market value. The less homogenous the area, the more prices seem to drift off target.
The other strange thing it does it show comparable sales many, many miles away from the subject property. In real life, we don’t look at comparable sales outside a given neighborhood or geographic area except in very rare circumstances. Zillow was showing comps for Travis Heights as far away as Oak Hill, which just isn’t correct.
But the satellite images of neighborhoods, complete with lot outlines, are very impressive.
I’m not clear on how Zillow plans to make money. Initially, it looks like they will be selling ads to mortgage and real estate people. Beyond that, it looks like Zillow hopes to become an authoritative resource for buyers and sellers to check home values. Perhaps they hope that someday, when a buyer asks a seller “how did you come up with the asking price for the home?”, the seller will respond “I priced it on Zillow” and hand the buyer a computer printout. Maybe Zillow wants to become for the real estate industry what the Kelly Blue Book and Edmunds are for auto valuations.
Scott Zillow, CFO & VP Marketing at Zillow.com, say on his blog the following:
“All this will help you avoid overpaying for a home, determine the right selling price, or just track the value of your most important asset. It’s also fun to see what other people’s houses are worth, and what they paid for their house…”
Maybe, but before people start printing out “Priced at Zillow” For Sale flyers to tape onto their front windows, Zillow will have to figure out a way to make the pricing accurate more than just some of the time. Ultimately, the market determines the value of your home, not a computer program. Computers can’t see gaudy colors or old carpet. Nor can computers smell dog and cat urine. Computers can’t see the rusty motorhome parked in the neighbor’s driveway that lowers the value of your home. I’m not sure the nuances and variables involved in the art of home pricing can ever be completely captured by an automated system, but let’s wait and see how this pans out.
But in the end, this is another example of how the real estate industry is changing very fast as technology enables new possibilities. I’m sure we’ll be hearing a lot more about www.Zillow.com.