4 ms·

While we're at it, lets also figure out why my Zestimate dropped $40k overnight two months ago. If I was planning to sell, I would have a huge problem on my han

While we're at it, lets also figure out why my Zestimate dropped $40k overnight two months ago. If I was planning to sell, I would have a huge problem on my hands. On top of it the Zestimate chart shows no indication that they dropped it $40k. Aiming to fix the number is a fool's game : my "private home estimate" on my owner dashboard is 23% higher. Its a worthless number, and they should stop trying to manipulate the market. Having a secret measurement formula that works for 70% of the houses but not the other 30% needs to either have a disclaimer that its all fantasy, or just outright be removed. I'm guesstimating those 70/30 numbers, but their site gives some locations 2 stars on their own scale: http://www.zillow.com/zestimate/#acc http://www.zillow.com/zestimate/#acc. If its not 4 stars, then don't publish it.

Finnucane 10y ago
From time to time, Zillow rejiggers (that's a technical term) their algorithm, resulting in sudden readjustments of estimates. Given that the Zestimate itself is presented as a fairly wide range, the error margin is hardly hidden. Also, it is important to remember that no appraiser from Zillow has actually looked at your house; the data is drawn entirely from sales data, public records, and volunteered information. So there's no way it can really account for every factor, nor does it even try. And there's a lag; the market can change faster than Zillow can. It is, at best, a rough ballpark estimate of what's going on in your neighborhood.
- mholmes680 10y ago
  point taken, but two observations: 1) its ridiculous to also "fix" the zestimate history. Put the old one in the history, and explain near the chart what rejiggered. 2) The market in my immediate area, as evidence by the comps from zillow and the sales prices in the newspaper, has only increased. The conservative comps are near the old zestimate - this is a suburban area. The wild ones are higher than my private estimate.
  - tmarthal 10y ago
    I think what you're actually seeing is the output of a Kalman Filter temporal model. The zestimate is the mean of the filter output, but the error bounds of the filter are more important than the actual mean/reported value. What happens is that the model uses trends to extrapolate from each "real" data point (in this case, a house sale in your neighborhood). The problem is, and what Kalman Filters help manage, is the uncertainty propagation between each house sale. When it has been a long time from when a sale has occurred, it is unclear what the real/actual price is of a home. This means that on the estimated price the error bounds are large, and zestimate still just reports the mean value of this huge uncertainty. What then happens is that a house is sold in your area, a new data point is recorded, and the filter re-adjusts itself and collapses its uncertainty/error bounds in the time of that measurement around the measurement. And you get correction. This is why the "old zestimate" is updated.
  - Finnucane 10y ago
    Yes, the little chart they show you has no history--it just extends back from the current data and the current algorithm. So what it shows you now as they value five years ago is different from what it showed you five years ago. In that sense it does not function as actually tracking the market. Does it really need to? What do you really care about beyond what you originally paid and what you might sell it for if you have to?
- ianai 10y ago
  With how slow real estate moves, thats saying a lot.
jeffwilder 10y ago
My house is recently on the market and the Zestimate and Redfin estimate dropped by 50k the day we listed. It's still higher than we listed but much closer to our number. I think we priced it fairly as we are having plenty of interest but I wonder what would be happening if it didn't change.
leviathant 10y ago
I paid $265,000 for my house, which at the time had a Zestimate around $500,000. After our purchase, the Zestimate slowly rose over $950,000. While I understand we got a good price on our building, I knew the Zestimate was garbage. A couple of weeks ago, the Zestimate dropped to $435,000. This would definitely be closer to an accurate value, but there's also no record of the recalculation at all in the graph. At this point, it's basically noise.

Finnucane 10y ago

From time to time, Zillow rejiggers (that's a technical term) their algorithm, resulting in sudden readjustments of estimates. Given that the Zestimate itself is presented as a fairly wide range, the error margin is hardly hidden. Also, it is important to remember that no appraiser from Zillow has actually looked at your house; the data is drawn entirely from sales data, public records, and volunteered information. So there's no way it can really account for every factor, nor does it even try. And there's a lag; the market can change faster than Zillow can. It is, at best, a rough ballpark estimate of what's going on in your neighborhood.

mholmes680 10y ago
point taken, but two observations: 1) its ridiculous to also "fix" the zestimate history. Put the old one in the history, and explain near the chart what rejiggered. 2) The market in my immediate area, as evidence by the comps from zillow and the sales prices in the newspaper, has only increased. The conservative comps are near the old zestimate - this is a suburban area. The wild ones are higher than my private estimate.
- tmarthal 10y ago
  I think what you're actually seeing is the output of a Kalman Filter temporal model. The zestimate is the mean of the filter output, but the error bounds of the filter are more important than the actual mean/reported value. What happens is that the model uses trends to extrapolate from each "real" data point (in this case, a house sale in your neighborhood). The problem is, and what Kalman Filters help manage, is the uncertainty propagation between each house sale. When it has been a long time from when a sale has occurred, it is unclear what the real/actual price is of a home. This means that on the estimated price the error bounds are large, and zestimate still just reports the mean value of this huge uncertainty. What then happens is that a house is sold in your area, a new data point is recorded, and the filter re-adjusts itself and collapses its uncertainty/error bounds in the time of that measurement around the measurement. And you get correction. This is why the "old zestimate" is updated.
- Finnucane 10y ago
  Yes, the little chart they show you has no history--it just extends back from the current data and the current algorithm. So what it shows you now as they value five years ago is different from what it showed you five years ago. In that sense it does not function as actually tracking the market. Does it really need to? What do you really care about beyond what you originally paid and what you might sell it for if you have to?
ianai 10y ago
With how slow real estate moves, thats saying a lot.

jeffwilder 10y ago

My house is recently on the market and the Zestimate and Redfin estimate dropped by 50k the day we listed. It's still higher than we listed but much closer to our number. I think we priced it fairly as we are having plenty of interest but I wonder what would be happening if it didn't change.

leviathant 10y ago

I paid $265,000 for my house, which at the time had a Zestimate around $500,000. After our purchase, the Zestimate slowly rose over $950,000. While I understand we got a good price on our building, I knew the Zestimate was garbage. A couple of weeks ago, the Zestimate dropped to $435,000. This would definitely be closer to an accurate value, but there's also no record of the recalculation at all in the graph. At this point, it's basically noise.