Wednesday, December 13, 2017

Ticketmaster is Scalping Tickets Again

Ticketmaster wants $160 in "service fees" just to buy 2 Taylor Swift tickets that are already $380 each. That is insane. No thanks.

Thursday, October 27, 2016

Zillow Zestimates Have Now Put Bumps on Their Bumps

We have reported here on numerous occasions the bizarre numbers used by Zillow for Zestimates, the Zillow estimate of a property's market value.  We have shown how inaccurate they are, but now we would like to describe a new problem that they have introduced.

First, on June 8, 2016, Zillow announced that they were changing the algorithm that they use for determining the Zestimate.  Not only did they change the current Zestimate value, but they were also changing them historically.  This was all done in the name of providing a more accurate Zestimate offering.

I have tracked the implications of this algorithmic change.  For many properties there were significant dislocations in the Zestimate as a result of the change to the algorithm, both current value and historical values.  Then, during the following month or so, the new Zestimate algorithm radically changed back to the original value or very close to it.  What conclusions can be drawn from such behavior of the Zestimate?  No rational basis can be discerned.

Now, on about October 24, 2016 the same phenomenon has occurred again.  However, this time there has been no press release or other comment by Zillow about the change.  Current Zestimate values have, in some instances changed dramatically, as well as the historical Zestimate information.

We have commented on the importance of this information for the financial "report card" of the property owner.  I personally applied for homeowner insurance on my home and was told by the agent that the replacement value used by them when they issue the policy is the Zestimate from Zillow.

This lunacy must stop!  A property owner opt out option must be implemented by Zillow.

Saturday, July 23, 2016

Corporate Discrimination Against English Speaking Customers

I had occasion to call a large corporate customer service center. My call was answered by an automated system that indicated that a representative would be with me shortly.  At regular intervals I was reinformed that a representative would be with me in a moment. Automated apologies that they had not been able to answer the call, but that a representative would be with me shortly.
After about 30 minutes of this repeated message I was disconnected by them.

I decided to call back and chose the Spanish option.  After about one minute a person got on the line and started speaking with me in Spanish. I answered in English and the conversation proceeded in English and the representative dealt with the issue I had originally call the company about in a very efficient manner.

Now, I ask, "why was I able to accomplish this by choosing the Spanish option, but not the English option?"  This is not the first time I have done this. The results have been consistent.  I get better service by dialing the Spanish option than the English option.

Why would a company be biased to provide better service to Spanish speaking customers than English speaking customers? I cannot think of one reason for this bias.  Perhaps some readers could opine on this matter.

Saturday, December 19, 2015

The Battle over the Purpose and Accuracy of Zillow

In a series of articles in the Washington Post in 2014, David Howell, CIO at McEnearney Associates, a Northern Virginia Realty firm, and Stan Humphries, Chief Economist at Zillow and architect of the Zestimate, slugged out their views on the accuracy and purpose of Zillow Zestimates.  To read their original articles just click on their respective names above.  I have not checked out the accuracy of Howell's claims about the accuracy, or, rather, inaccuracy of Zestimates for the northern Virginia market, but I would venture to say that his numbers are not inconsistent with the observations that I have seen elsewhere.  Humphries, on the other hand, while suggesting that the numbers put forward by Howell are slightly inaccurate because he has not performed the analysis on a large national basis, points out that the Zestimates over time are getting more accurate, which may, in fact, be true based upon the way that both he and Howell measure their results.  However, I believe that in the arguments put forward by Humphries there are some very troubling and subtle slights of hand being proffered:

First, all the studies of accuracy are based upon the Zestimate at the time of sale vs. actual sale price of a given home that has sold in the marketplace during the period being measured for accuracy.  This sounds like a simple enough measurement.  However,  I have shown in an earlier writing, a phenomena that I have called the Zillow Bump.  For those of you unfamiliar with this phenomena I suggest that you read the entry.  In that analysis I show a very curious change in Zestimates that occurs once a property gets listed.  Namely, if there is a significant difference between the Zestimate and the listing price, then the Zestimate will start on a very rapid journey to get much closer to the listing price. I have speculated as to the reason for this Zillow Bump and the reason why I feel this is a disingenuous attempt by Zillow to "improve" Zestimate results over time.  In essence, there is a small window of time for Zillow to more closely align the Zestimate to the sale price, so that at the time of sale (ie., when the data is collected) the Zestimate is within a closer range of the actual sale price.  That window is between the time that a home goes up for sale and the time it actually sells. 

Before I get into this point any deeper I want to cover another issue raised by Humphries -- that the original listing price vs. actual sale price is no more accurate than the Zestimate. The implication here is that the two numbers (ie., original listing price and Zestimate) are to be considered identical prognostications of the actual sale price. Nothing could be further from the truth.  A listing price by an owner in consultation with a broker is usually intended to be close to the intended actual sale price, but usually with a bias to the higher side of the actual sale price. This is not always the case, particularly in very hot markets where bidding wars are expected.  I do not have accurate statistics, but I would venture to say that in normal markets the actual sale price of a home is somewhere between 5% to 10% below the listing price (except, as I noted, in very hot markets).  The listing price is never intended to be the market value of a home.  It is intended to be approximately 5% to 10% above the actual sale price.  So, to do an apples to apples comparison between listing price and Zestimate the upside bias of the listing price should be removed.  Once this bias is incorporated into an analysis it will be evident that this "adjusted listing price" is a much better estimate of actual selling price than the Zestimate is.

Now, getting back to the first point, we can now more clearly see what the Zillow strategy is -- to "cook the books" on the analysis of Zestimate vs. actual sale price by altering the Zestimate and hopefully bring the Zestimate to about 8% below the listing price before the house sells and then claim that they are within a tight range.  This is a shell game.  It is an implicit acknowledgement by Zillow that the broker/owner listing price is a much better basis for actual sale price (adjusted to account for the broker bias) than the original Zestimate and that the original Zestimate before the house was listed is literally worthless.

The final point to be made would be that Zillow is talking out of both sides of their mouth when they claim, on the one hand, that the Zestimate is not an appraisal price, but, on the other hand, that because it is as accurate as the listing price, it can be used as a measure of value.  This is a very dangerous argument.  Howell has aptly pointed out that the homebuyer is greatly influenced by the internet and because of the blurring of what a Zestimate really is and how inaccurate it is, the prospective  buyer is unfairly influenced by it.  This means that the seller is unfairly influenced by it too.  

Clearly, Zillow is free to compute whatever it wants to, but at the same time, owners should be able to opt out of this charade of the Zestimate accuracy.  In my piece Zestimates from Zillow are Worthless I argue that the Zestimate is as important as a person's FICO score and that the abusive implementation of Zestimates by Zillow should be regulated with legislation similar to the Fair Credit Reporting Act.
Bill Gasset, a ReMax realtor in Hopkinton, Massachusetts, wrote a very interesting piece shortly after the Washington Post articles appeared on the Zestimate inaccuracy issue.  In Bill's article he very aptly sums up many of the problems with the Zillow Zestimate, and actually had some positive things to say about the Zillow platform.
In 2015, The Los Angeles Times also ran an article on the inaccuracy of the Zillow Zestimates.  They reported on an interview on the TV show "CBS This Morning" where co-host Norah O'Donnell asked Zillow's Chief Executive, Spencer Rascoff, about the inaccuracy of their company's Zestimates. Rascoff's position is that the Zestimate is a "starting point" for determining the value of your home. In my humble opinion, it is a "starting point" as good as one you might hit when throwing a dart while blindfolded.  It is a marketing gimmick to attract attention to the Zillow website, no more, no less.

The proper numbers to measure are pre listing Zestimate vs. Actual Sales price.  You may want to factor in some sort of small deviation from this difference to take into account changes in the areas during the listing time.  For example, if immediately before the time that a home was listed it had a Zestimate of, let's Say X, and it took six months for the home to sell, then it would make sense to alter that number X by the amount that homes in the immediate area (say zip code, or something like this) have changed during that period.  For the case in point, let's say that it is six months and that the zip code has increased in value by 1.3%, then it would be fair to argue that the proper Zestimate value to use for comparison to the sale price is 1.013X, not X. 

Wednesday, November 25, 2015

Zany Zillow

The Zillow Zaniness continues.  I have posted twice before on Zillow and their infamous Zestimates.
I have found another Zestimate that defies gravity that I would like to share with you.

The upper line in the chart below is the Zestimate of the subject home as a function of time from about the beginning of 2007 to the present. The lower lines are the prices for homes in the same zip code and the town.  The two latter lines seem to be very closely correlated with each other and are moving in a rational manner.  The green dot with the "S" is placed at the date and value of the last sale of the property in 2010.
Property A, version 1

Below I have listed the sale transactions on this home since 1999:
Date                                  Sale Price
8/10/1999                          $650,000            
4/1/2005                         $1,350,000
9/24/10                              $500,000

Unfortunately, the Zestimate chart does not go back to 2005, but from the best I can figure the Zestimate must have been considerably higher than the actual sale price.  Then, in September, 2010, the home sold for $500,000, yet the Zestimate at the time of the sale was $2,500,000, a full 500% of the sale price.  If that wasn't enough, then by May, 2015, the Zestimate for this home had gone up to $4,000,000.  a full 800% above the price it sold for some 4 1/2 years earlier.  Now, you might think that this home was renovated, or there was an addition or something.  That is not the case.  The home remains the same, except the city removed a tree at the street in front of the home in May, 2015. So, what happened to the Zestimate?  It now has dropped in six months from $4,000,000 to $2,945,000, a full $1,055,000. or about 26.5%. 

Can you give some explanation for this fluctuation in the Zestimate? I can't.

****************update 1/21/16***********************
The Zestimate on the above home has continued to slide. As of today it is $2,657,800. So, we now have the Zestimate dropping by almost another $300,000 in two months.  Total drop of $1,342,200 or a full 1/3 of its value in about eight months.

In another attempt to get a handle on the algorithm that Zillow utilizes to come up with their Zestimates I took my home and made some minor changes to the Home Facts.  I changed the flooring material from hardwood and carpet to hardwood, carpet, and tile. I changed the exterior from stucco to stucco and wood.  The result was a decrease of nearly $200,000 in the Zestimate.  I restored the Home Facts to the original values and the Zestimate dropped another $5,000.  More Zaniness.

******************additional material added 1/21/16****************
I have found another home with Zany Zestimates. Please consider this home.  Here is the Zestimate Chart.

And here is a chart of the activity on this home:

Date                 Zestimate         Listed Price
7/14/14            3,200,000          2,995,000
11/25/14          3,300,000          removed from market
5/1/15              3,500,000          unchanged (off market)
6/1/15              3,100,000          unchanged (off market)
9/14/15            3,200,000          2,850.000
11/1/14            3,200,000          2,850,000
12/8/15            3,500,000          2,895,000
1/20/16            3,730,900          2,895,000
1/21/16            3,746,500          2,895,000
1/24/16            3,759,900          2,895,000
2/7/16              3,837,500          2,895,000
2/14/16            3,895,000          2,895,000

Here we really have the Zestimate gone wild.  We have an unbelievable divergence between the Zestimate and the Listed Price.  Since the Zestimate started above the Listed Price, the Listed Price has dropped, AND the Zestimate has increased substantially.  Does anyone really think the Zestimate has any relationship to the market value of this home?

As of 2/14/16 the Zestimate has risen by $695,000 since 9/14/15.  That is a whopping 22% in exactly 5 months. But even more weird is that now the Zestimate is exactly $1,000,000 ABOVE the Listed Price. That's 34.5% above the asking price. Yeh! Without even looking at this home I am going to guess that it will sell for about $2,637,000.  Let's see what happens.

***************additional material added 6/17/2016***************************

This chart below labeled Property A, version 2 is for the same property as the one labeled Property A, version 1 (the first chart above).  You will note that the only sale is for the same amount, but what zillow has done here is revisionist history.  In the chart above the property peaked at about $4M, but this one now reads less than $3.5M. Note also that the Zestimate in the period from about 2010 to about mid 2012 was hovering just above $2M while the chart above was near or above the $3M level.  I know it is an expensive home, but a 33% drop is a bit much of revisionist history.
What could be in their minds?  This must be a random number generator hoax or something.

Property A, version 2

update as of 11/4/2016

We have an update on this home. Please note in the chart below (same property) that the revisionist history of the Zestimate continues.

Notice that about December, 2015, in the upper chart the Zestimate is clearly below $3M, and in the second chart the value is clearly below $3M !

last modified 11/4/16

Monday, November 9, 2015

The Zillow Bump

For readers of this blog, my fascination with the audacity of Zillow is not new.  If you will recall, I wrote in September, 2014, that Zestimates from Zillow are Worthless by showing that there is no rhyme or reason to the numbers that they publish as the "market value" to a home. I posted many updates to that post.  I have now observed a variation on this that further supports this hypothesis.

My first example is a home that had a Zestimate of $1,700,000.  Then, on March 4, 2015, this home was listed for sale for $3,780,000.   You can see from the chart below what has happened to the Zestimate for this home primarily based upon the home being placed on the market:

Five months later, in August, 2015, the Zestimate had zoomed to $3,358,700.  This is almost a 100% rise in the Zestimate.  Subsequently, on September 11, 2015, the listing for the home was shown as a pending sale, On October 28, 2015 the home closed at $3,300,000. As of November 9, 2015,  only two weeks later the Zestimate dropped by $385,600  to $2,973,100.  What could possibly be the explanation of this bump? My hypothesis was that it would be too obvious if Zillow increased the Zestimate to match slightly less than the listing price on an immediate basis, but rather gradually increase the Zestimate, so that by the time of the sale a number of months later the Zestimate would rise enough in the interim to more closely correlate to the sale price.

However, here is another example that seems to demonstrate that they have no shame. This home had a Zestimate of $1,358,500 on October 9, 2015.  Then, on November 4, 2015, this home was listed for sale for $2,495,000.   You can see from the chart below what has happened to the Zestimate for this home solely based upon the home being placed on the market:
As of November 11, 2015, the Zestimate for the home was $1,914,300, an increase of $555,800 over 30 days previously.  That is an increase approaching 50% in one month.

Zillow prides itself on the fact that the statistical correlation between the Zestimate and a home's sale price is high.  Could it be that Zillow is "cooking the books," so to speak, by trying make the Zestimates "catch up" to the expected sales price by BUMPING them up when the home gets listed for sale?

As a corollary, consider this: realtors pride themselves in pointing out that listing prices are strongly statistically correlated to sales price.  I believe this to be true.  Realtors like to have realistic prices on homes going up for sale and strive to get the owner to select a price approximately 5% to 10% above the projected sales price.  That is good for them because it means that they have a better chance of actually selling a more realistically priced home.

So, if the correlation between listing price and sale price is stronger than the Zestimate price and sale price, then Zillow is correct to dramatically alter the Zestimate by moving it much closer to the broker listed price upon listing.  But, the other corollary is that this is an open admission by Zillow that the Zestimate published by them prior to listing are truly worthless!

If the powers that be at Zillow would like to try to refute this conclusion I would be more than happy to publish it here (so long as they remain factual).

**************update as of 11/30/15 with additions afterwards*******************

Here is a spreadsheet for these two properties above with data to make them current.  The theory of the interpretation of the Zestimate algorithm function changes seems to be gaining strength. I think what remains is to find out the weighting factor for increases and decreases on the spread of the Zestimate from the listing price.

                                Property #1                                    Property #2

Date                                    Total change                                     Total change
                    Zestimate        in  Zestimate            Zestimate         in  Zestimate

3/4/15          1,700,000     (Listed $3.78M)                                                 
8/1/15          3,358,700        +$1,658,700                                                    
9/11/15        3,358,700   (Listing Removed)                                               
10/9/15                                                              1,358,500  
10/28/15      3,358,700       (Sold $3.3M)                    
11/4/15                                                              1,358,500     (Listed $2.495M)
11/9/15        2,973,100           -$385,600           1,914,300          +$555,800
11/17/15                                                            1,917,400          +$558,100
11/18/15                                                            1,922,400          +$563,100
11/24/15      2,895,800           -$462,900           1,926,200          +$566,999 
11/26/15      2,880,799           -$478,000           1,925,700          +$566,400
11/27/15      2,857,900           -$500,800           1,928,500          +$569,200
11/30/15      2,846,200           -$512,500           1,931,200          +$571,900       
12/2/15        2,842,200           -$516,500           1,931,100          +$571,800
12/3/15        2,842,000           -$516,500           1,931,100      (List Reduce to $2.395M)
12/4/15        2,838,400           -$520,100           1,931,800           +$572,500
12/7/15        2,834,700           -$523,800           1,926,700           +$567,400
12/11/15      2,821,600           -$536,900           1,924,000           +$564,700
12/14/15      2,819,800           -$538,700           1,925,800           +$566,500
12/18/15      2,816,500           -$542,000           1,927,200           +$567,900
12/24/15      2,810,600           -$548,400           1,929,200           +$569,900
12/28/15      2,805,400           -$553,600           1,930,200           +$570,900
12/30/15      2,805,300           -$553,700           1,931,900           +$572,600
1/2/16          2,805,100           -$553,900           1,934,500           +$575,200
1/4/16          2,804,100           -$554,900           1,937,100           +$577,800
1/6/16          2,805,800           -$553,200           1,940,800           +$581,500
1/8/16          2,810,500           -$548,500           1,944,400           +$585,100
1/9/16          2,815,900           -$543,100           1,946,600           +$587,300
1/10/16        2,814,600           -$544,400           1,949,400           +$590,100
1/11/16        2,813,200           -$545,900           1,949,900           +$590,600
1/12/16        2,812,100           -$547,000           1,950,700           +$591,400
1/13/16        2,809,400           -$549,700           1,950,900           +$591,600
1/14/16        2,809,000           -$550,100           1,951,600           +$592,300
1/15/16        2,815,000           -$544,100           1,948,700           +$589,400
1/16/16        2,820.800           -$538,300           1,948,900           +$589.600
1/17/16        2,826,500           -$532,600           1,949,400           +$590,100
1/19/16        2,837,400           -$521,700           1,949,900           +$590,600
1/21/16        2,846,700           -$512,400           1,952,200           +$592,900
1/22/16        2,849,900           -$509,200           1,952,300           +$593,000
1/23/16        2,853,400           -$505,700           1,951,800           +$592,500
1/24/16        2,857,100           -$502,000           1,951,800           +$592,500
1/26/16        2,861,500           -$497,600           1,952,400           +$593,100
1/27/16        2,866,100           -$493,000           1,951,200       (List Reduce to $2.249M)
1/29/16        2,865,300           -$493,800           1,950,200           +$592,100 (sale pending)
1/31/16        2,869,200           -$489,900           1,951,000           +$592,900
2/2/16          2,876,100           -$483,000           1,948,900           +$590,800
2/7/16          2,894,700           -$464,400           1,945,100           +$587,000
2/8/16          2,895,300           -$463,800           1,944,800           +$586,700
2/14/16        2,917,500           -$441,600           1,944,700           +$586,600
2/16/16        2,926,000           -$433,100           1,942,200           +$584,100
3/3/16          2,972,800           -$386,300           1,921,400           +$563,300 (sold at $2.225M)

On Property #2 the Zestimate increased to within $564,800 (22.6%) of the listing price, but since the listing price was subsequently reduced the Zestimate of 1,952,400 was within $442,600 (18.5%) of the reduced listing price ($2.395M). Then, the listing price was reduced again ($2.249M) so that the Zestimate is within $297.8M of this new price, so the Zestimate is within 13.2% of the listed price. Finally, the house is listed as pending sold. Once we have the actual sale price we can compute the accuracy of the pre listing Zestimate and the final Zestimate at the time of sale with the sale price.  What is the target that Zillow is aiming for?
Now the results are in. The house sold for $2,225,000 based upon going into contract on 1/27/16.
On that date the Zestimate was 1,951,200. The Zestimate at the time of contract was 12.3% below the sale price.  The Zestimate was $1,358,100 on the day the house went up for sale. So the unadulterated Zestimate was 39% below the presumed "market price". Wow!
We see that for Property #1 above the Zestimate increased to within $420,000 (11.1%) of the Listing price on or around 9/11/15. After the listing was removed for this home (it had gone into contract) the Zestimate has dropped to a low of $554,900 (16.4%).  While the Zestimate of $3,358,700 at the time of the listing removal was within $58,700 (1.7%) of its actual sale price, it is clear that the bumping algorithm worked well in this instance with the objective of Zillow being achieved in getting the sale price close to the Zestimate at the time of the sale.  But it is also clear that the Zestimate prior to the one that did not have the benefit of a professional estimating the listing price was worthless. It was a full 48.5 % below the actual sale price.  And what do we make of the new Zestimate low on 1/4/16 of $2,804,100 which is 16.5% below the actual sale price which was only about two months prior to this date?  This makes no sense. And now again between 1/4/16 and 2/14/16 the Zestimate has increased by $113,400.  That is an increase of 4% in just over 40 days.  And by 3/7/16 it had risen from 1/4/16 the Zestimate had increased by $168,700. That's 6% in two months!                                                                                            

******************update as of 1/2/16*********************************

I have now found some additional examples of the Zillow Bump that should add more fuel to the fire.
First, let me put up the data for consideration.  This is the asking pricing information for this home
It was listed at $995,000 in late June 2015.  In December, after the fourth price drop it was listed at $795,000

Now, let's look at the Zestimate. I do not have complete information on the history here.  It shows that sometime around the time the house was listed, the Zestimate was around $960,000.  There is no record of a Zestimate price for this home shown before that date.  However, this is a subdivision and the other 40 homes in this subdivision all have Zestimates between $580,000 to $708,000. This home does not stand out, so it would be fair to assume that before the listing for sale the Zestimate was around $644,000.  Interestingly, Zestimates for other homes in this subdivision have increased in value consistently about 5.4% during this period of time, in contrast with this home where the Zestimate has diminished in value by about 15.1%, making the variance a whopping 20.5%.

Now, to make this Zillow entry even more bizarre is the fact that the house appears to be listed twice, but only one of them is listed for sale.  So, we have a duplication of the same data, once for the home that is listed, and once for the very same home that is not listed.  The listed home Zestimate is $720,800 and the identical home not listed has a Zestimate of $646,100, about a few hundred dollars off the median for the other 40 homes in the subdivision.  I think this is as conclusive as it is going to get evidencing the true slight of hand being used by Zillow to fudge the Zestimates of listed homes just before they sell to bring them closer to the anticipated sale price to improve their "claim" of Zestimate accuracy. Also, note that as of 1/2/16 the current Zestimate is $65,000 (8.2%) below the current asking price, which appears to be Zillow's best guess at where the sale price will be at this time.  Very interesting, indeed!

Below I am tracking the information on changes to Zestimates for the two variants of this one home:

Property #3
                                 Zestimate           Zestimate            Asking       Listed Zestimate %
Date                       Listed Home     Unlisted Home         Price        Below Asking Price
1/2/16                       $730,000           $644,800            $795,000             8.2%
1/7/16                       $728,100           $644,700            $795,000             8.4%
1/8/16                       $727,100           $644,400            $795,000             8.5%
1/9/16                       $726,600           $644,400            $795,000             8.6%
1/10/16                     $726,700           $644,900            $795,000             8.6%
1/11/16                     $726,100           $644,900            $795,000             8.7%
1/12/16                     $725,400           $644,800            $795,000             8.8%
1/13/16                     $724,900           $645,200            $795,000             8.8%        
1/14/16                     $724,600           $645,300            $795,000             8.9%
1/15/16                     $723,900           $644,700            $795,000             8.9%
1/16/16                     $723,600           $644,800            $795,000             9.0%
1/17/16                     $723,600           $644,700            $795,000             9.0%
1/19/16                     $722,500           $645,300            $795,000             9.1%
1/21/16                     $721,800           $645,000            $795,000             9.2%
1/22/16                     $721,500           $645,100            $795,000             9.3%
1/23/16                     $721,200           $645,300            $795,000             9.3%
1/24/16                     $720,900           $645,000            $795,000             9.3%
1/26/16                     $720,800           $645,100            $795,000             9.3%
1/27/16                     $720,400           $645,500            $795,000             9.4%(sale pending)
1/29/16                     $719,900           $646,200            $795,000             9.5%
1/31/16                     $718,700           $647,400            $795,000             9.6%
2/2/16                       $717,900           $647,000            $795,000             9.7%
2/7/16                       $716,800           $645,900            $795,000             9.8%
2/8/16                       $716,200           $645,300            $795,000             9.9%
2/14/16                     $716,700           $652,200            $795,000             9.8%
2/16/16                        ------               $653,900            $750,000             4.4% (sale recorded)

Currently, there is only one home listed above (Property #2) that is currently for sale (pending) and it has a Zestimate that is 13.6% below the listing price.   Right now I am approximating that the home will sell for approximately 8.9% below the listing price, so that would bring the Zestimates to be about 4.7% below the asking price. Recall that the Zestimate for property #1 above ultimately sold for 1.4% below the sale price.

Property #3 is a bit more difficult to analyze because Zillow had two distinct listings for the same home. I think the only fair way to do this is to look at the two algorithms that they used.
In the first case the Zestimate was was essentially $646,100 before the house was listed, and it sold for $750,000.  This means that the Zestimate was really understating the market price by 13.6%.  But, the artificial Zestimate created after the house was listed was $720,400 at the time that the house became a pending sale. This is an understatement of $29,600 for the market price that it was eventually sold for, or just 3.9% below, meaning that they fudged the accuracy of the Zestimate with this technique by a full 9.7%. Astounding!

 So, it looks like their cooking the data books technique is working quite well for them, pity the poor person that relies on their claims of accuracy.  It may be that the Zestimate target for listed homes is variable by region, or possibly even by price or some other metric that we don't know about.

A final note on Property #3 now that the property has sold at $750,000 please note that the Zestimate is currently $653,900, a full 12.8% below the current market price.  You would think that they might adjust the Zestimate with the new data point.  We will continue to follow this bizarre behavior of this algorithm a bit further.

last modified 3/7/2016

Thursday, June 11, 2015

After Court Battle Equifax Admits that God Exists

As reported in the Canadian Globe and Mail and the New York Daily News, Equifax consents to the existence of God.

"Without a decent credit rating, it’s tough to borrow for large purchases, as a Russian-American discovered.  The New Yorker, owner of a business called Gold Hard Cash, was refused a car loan because rating agency Equifax would not provide financial details on the man.
The problem? God Gazarov was told by Equifax that it “could not process his name as God.”   The suit alleged that an Equifax official told Gazarov it could not provide him or a lender with his credit file "because it could not process his name as 'God' and suggested that he should consider changing it."
After appearing before Brooklyn Federal Magistrate Judge Ramon Reyes, the two parties to the suit struck an agreement, and Equifax will now acknowledge God’s name. He will also receive an undisclosed monetary settlement from the company...
Mr. Gazarov claims his name is not uncommon in Russia, and that he was named after his grandfather. Still, he’s used to the jokes. “My principal in junior high school would walk by me in the cafeteria and say, ‘Oh my God, there he is.’” "
Not to unlike the battle I faced with Equifax over the existence of my address,  but I'll be the first to admit that this was much better than my reported problem.