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I don't have an opinion on whether zestimates are accurate. But this blog post has 9 samples from only 3 cities. And the author seems to be making claims base

I don't have an opinion on whether zestimates are accurate. But this blog post has 9 samples from only 3 cities. And the author seems to be making claims based on that. This is a lame "thought leadership" post as a subtle ad for his company. At least give me 10-20 homes in each of 10-20 cities if you are trying to convince me of something systematic.

kosei 10y ago
Agreed. If you're going to try to do any sort of data-driven study, citing a sample size of 3 houses per market is ineffective and very likely to be misleading.
alexpetralia 10y ago
This is a good example of how commonly and easily 'faux' statistical evidence can incite large reactions primarily composed of anecdotes.
Bartweiss 10y ago
The only really interesting thing I saw in this post was the discussion with realtors. It's significant that Zillow uses long-term averages, and therefore can't price in abrupt market shifts even once they're common knowledge. If nothing else, it implies that "Zestimates" are a bit dubious in tight urban markets where high variance is more possible. Of course, it also looks like Zillow is aware of that challenge. The ostensibly data-driven part was by far the least convincing section - as soon as I saw the sample size I decided it was nothing more than a starting spot-check.
- cestith 10y ago
  Perhaps Zillow is more interested in showing the longer-term market value of a home so buyers know if they're being asked for a high demand-driven price. A tight market like that can spring up quickly and fade away just as quickly. At some point most people are going to look to resell or to at least not be forever upside down because they bought during a tight market.
pdabbadabba 10y ago
It's even worse than that, really. The author actually concedes that Zillow's listed median error is accurate--but then cherry picks a few cases that are outside that margin, and uses these to make sweeping claims about how its time to stop using Zestimates. But, of course, a few cases outside the median error, here or there, are virtually guaranteed to exist no matter how good the model is. It seems to me that the real news here is actually that the Zillow median error is really good, given the data they have to work with and the scale on which they are operating. Of course, this does not mean that the Zestimate will be valuable in all cases. Individual buyers, sellers, and their agents and appraisers will often have fer better information about any given home. But everyone should have realized this already.

kosei 10y ago

Agreed. If you're going to try to do any sort of data-driven study, citing a sample size of 3 houses per market is ineffective and very likely to be misleading.

alexpetralia 10y ago

This is a good example of how commonly and easily 'faux' statistical evidence can incite large reactions primarily composed of anecdotes.

Bartweiss 10y ago

The only really interesting thing I saw in this post was the discussion with realtors. It's significant that Zillow uses long-term averages, and therefore can't price in abrupt market shifts even once they're common knowledge. If nothing else, it implies that "Zestimates" are a bit dubious in tight urban markets where high variance is more possible. Of course, it also looks like Zillow is aware of that challenge. The ostensibly data-driven part was by far the least convincing section - as soon as I saw the sample size I decided it was nothing more than a starting spot-check.

cestith 10y ago
Perhaps Zillow is more interested in showing the longer-term market value of a home so buyers know if they're being asked for a high demand-driven price. A tight market like that can spring up quickly and fade away just as quickly. At some point most people are going to look to resell or to at least not be forever upside down because they bought during a tight market.

pdabbadabba 10y ago

It's even worse than that, really. The author actually concedes that Zillow's listed median error is accurate--but then cherry picks a few cases that are outside that margin, and uses these to make sweeping claims about how its time to stop using Zestimates. But, of course, a few cases outside the median error, here or there, are virtually guaranteed to exist no matter how good the model is. It seems to me that the real news here is actually that the Zillow median error is really good, given the data they have to work with and the scale on which they are operating. Of course, this does not mean that the Zestimate will be valuable in all cases. Individual buyers, sellers, and their agents and appraisers will often have fer better information about any given home. But everyone should have realized this already.