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.

No comments:

Post a Comment