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From time to time, Zillow rejiggers (that's a technical term) their algorithm, resulting in sudden readjustments of estimates. Given that the Zestimate itself i

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.

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.