Zillow Adds 10 Million Homes, Adopts Real Estate Data Standard With Yahoo and Trulia
Erick Schonfeld
36 comments »
Real-estate site Zillow has added 10 million homes to its Website, bringing the total to 80 million (out of 91 million homes in the U.S.). Of those, the properties it has enough information on to calculate a “Zestimate” is now 67 million, up from 53 million before. Zestimates and comparable-sales data are the two biggest draws to the site, says president Lloyd Frink, who dropped by my office on Wednesday.
I gave Frink a hard time because I always find the Zestimates for properties in New York City to be way off base. “New York is tough,” he admitted. But Zillow has tweaked its algorithm and improved the accuracy of its Zestimates by 12 percent (as measured by the actual sale price versus the last Zestimate on the day of the sale).
The algorithm improved by diving deeper into the data. “We went from having a model for each county to 20 models for each county,” says Frink. The Zestimates also now take into account more than one million corrections and facts added by home owners. The margin of error is now 8.8 percent. That is an average for the entire country. You still can’t trust the Zestimates on New York City apartments. But Frink notes that a third of the site’s Zestimates across the country fall within five percent of the selling price, and that half are within 10 percent. Still, he cautions that “the Zestimate is just a starting point.”
You’d think that real-estate sites would be hurting right now, given the severe correction in the housing market. But Frink argues that in a down market research is more important than ever and says that Zillow is still benefiting from the overall shift in real estate activities to the Web. Zillow’s ad model certainly benefits from various targeting capabilities-geographic, demographic, and behavioral. Each action on the site is zipcode-specific. Frink notes that the EZ Ads Zillow sells itself go for $10 CPMs, versus $3 to $5 CPMs for backfill ads from ad networks.
Zillow is trying to create a database of all homes in the U.S., which is a different approach than other real-estate sites. “It is the database of all homes, not just homes on the market,” notes Frink. This is both a strength and a weakness. On the downside, Zillow lists only 400,000 homes that are for sale, out of about 4 million nationwide. A deal with real-estate publisher Network Communications will bring that total to 900,000. Trulia, in comparison, has 2 million.
On the upside, Zillow has a lot more comparable data than most sites. (Although, I think Cyberhomes has better data). And since Zillow lists all existing homes, it makes it easy to provisionally put your house on the market through its “Make Me Move” feature. About 100,000 Make-Me-Move homes are on the site. And in some markets, it is a pretty significant number. For instance, in Seattle (where Zillow is based), there are 30,000 homes officially for sale and another 6,000 Make-Me-Move listings, or 20 percent of the number on the market.
The other big news is that Zillow is joining Yahoo Real Estate, Trulia, Oodle, Homes.com, Realestate.com, Vast.com and others in adopting a standard way for brokers and multiple listings services (MLSs) to send in their real estate listings in a feed format. That way brokers can use the same data format for all the different real estate search engines and Websites. It is called the Real Estate Transaction Standard (RETS). [Correction: RETS is actually a different, pre-existing, standard that the new listing feed standard will interoperate with]. That should make it easier for brokers to propagate their listings everywhere.
Zillow claims 4 million monthly unique visitors. Comscore shows 1.4 million in December, and that’s been flat for the past year. Trulia, though, looks like it just passed Zillow with 1.6 million.
This is yet another example (prosper.com and loan sites are another) of why I disagree with the whole ‘digestion-phase’ idea, like there aren’t good big new ideas around right now. There’s a ton of great ideas going right now, that are making huge differences in real world life. The fact that I can auto-transfer my friends list from MySpace to Facebook or vice versa has the potential to save me like 20 minutes. Sites like Zillow and Trulia have the potential to save me tens of thousands of dollars, and at work we were able to borrow like $25K through Prosper for advertising, making a huge difference before Christmas.
This should be Zillow’s next-to-last moment of fame. The last one will be their bankruptcy.
@ Morgan - Thank you. You’re spot on; information can add significant value in the hands of the right consumer. I think the reason this data-driven value add is not better understood is because the value of smart decisions is simply difficult to measure … and because the “infotainment” concept has been hyped a bit too much.
Erik -
A minor correction; RETS is not the standard listings distribution format. RETS is a real estate data standard used for broader use cases than just listing information. We have however partnered with the RETS group to ensure that these standards will be interoperable.
When I read the title of the blog post first in my small feed reader I thought zlio.com added a real estate database. That would be a great tool to design my favorite houses store. Who knows better the regional real estate pearls than regional residents. Might affect the margin of estate agents.
@Paul
This should be Zillow’s next-to-last moment of fame. The last one will be their bankruptcy.
I agree, brought down by it’s own weight. Scaled off the scale in fact.
Zestimate is useless. People do upgrades inside the house all the time and without going into the house and look, you can’t even come close to getting a fair price on the property. Talk to any real estate professional and they’ll tell you that Zillow is a toy, to put it nicely. I’m not saying that because I’m in the real estate business which I’m not in.
Btw, zillow raised too much money and now they have no way out other than an IPO which is impossible for them to achieve at this point unless they completely change their business model.
I would be very interested to find out the number of pages per visit from those 4 million unique visitors for zillow.com.
Thank you
very good
Anyway Zillow seems nice model for real estate market, they’ve nice community as well, possibly they might go on social networking route.
@micfo - yes, community is an critical part of Zillow’s growth plan and with this release. User profiles, community discussions and user submitted photo’s are already popular content on Zillow and we plan to add to that feature set in ‘08.
@andreaa - sorry, but as a private media company, we’re not discussing PV’s at this point. I can tell you that PV per UU is growing nicely. Our recent expansion of real estate listings content and community vibrancy are two important factors in driving that growth.
@David - about 4 million people every month would disagree with you.
Seriously though, raw data quality (from public records) is a challenge to we face but Zillow is innovating in this area; agents and owners can correct the home facts on Zillow and as of this release, those corrections will start to be factored in to improve Zestimate accuracy.
Zillow is an extraordinarily useful website. I am not sure why it has still not become popular in US. It feels like they have not advertised it well.
bookmarked @ http://livbit.com
Andreea,
December Neilsen data for Zillow is:
2.6 million unique visitors
Time Per Person: 8.29 minutes
Total Page Views 43 million
Web Pages Per Person 17
I hope this helps.
“But Frink notes that a third of the site’s Zestimates across the country fall within five percent of the selling price, and that half are within 10 percent.”
based on these numbers there is a good chance that 1/3 are over 20% off, possibly 30%+, and it is a fact that 1/2 are over 10% off.
That’s over $50K on a $500,000 home
It’s a fun service just not that helpful, yet.
vFlyer, a marketing platform for real estate agents, is also participating in this real estate listing format standard. vFlyer presently distributes listings to a number of these real estate marketplace.
Zestimate has been a hit or miss to me. Maybe Zillow can allow the owner to add a “zestimate correction” and the end user can see both the zestimate price and owner input.
I have a friend who’s parents own one of the most expensive houses in Columbus OH. They are selling it for 8.5-9 million dollars. Zillow zestimates it at 1.5 or so. That’s REALLY lame. I dont understand the issue since the comparibles in the area are around the 4 to 5 million dollars i believe so 1.5 just seems real off.
Erick, the biggest problem with the zestimates in central cities is that zillow doesn’t take into account parking. While this would be understandable as it is somewhat difficult (parking info is often not in the city real-estate records) they don’t even offer an easy way for folks to indicate that a particular property has parking, or a standardized way to price it. In downtown DC, parking spaces in existing buildings are selling for $45-55K, 10%+ of the average price of a DC condo, I have to assume other east coast cities are similar. Right off the bat this means that zestimates for urban properties with parking are 10% low - not a trivial difference. One can hope that zillow can shape up, but site-wide mistakes like this don’t inspire much confidence.
@Erick, I have an investment banker friend who owns a very $$ house in Marin, CA and the bank actually QUOTED Zillow to show that the house had supposedly de-valued by almost $2M in the past 6 months (they had had an appraisal done 6 months earlier). A bank! They quickly pulled away from the bank saying that if the bank was going to quote an online source that’s not proven reliable they wouldn’t deal with them.
I like Zillow though to look at it and see my (old) neighbour’s house prices…
My biggest complaint by far about Zillow is Zestimates.
When the president of the company makes statements about Zestimates like:
“…Frink notes that a third of the site’s Zestimates across the country fall within five percent of the selling price, and that half are within 10 percent.” - its not an estimate of value. Its a sometimes not even in the ballpark GUESS.
@JSM - The house is rural. Outside the outterbelt where parking isnt an issue. Its in the New Albany area if that helps. Same neighborhood Les Wexner lives in.
@antje - I heard about some banks starting to utilize Zillow as an estimate tool and that is sort of scary. They are welcome, i suppose, but its bad business to rely on that as their means of determining valuation of a house.
They’ve got to do something to keep up with Trulia. I think we may start to seel Zil and Tru start to differentate themselves from each other more. It will be interesting to see which one the consumers choose.
Excellent points. As Zillow gets access to more active listing data they will further be able to tighten up their Zestimates as they can factor in that more current information such as time on market and listed price vs. sold price.
Yes, Z may have an uphill battle to profitability but this current market may help them in my opinion as many consumers are very concerned about property values as can you see in search trends for “property / home / house value” keywords. Z is publicly known as the go-to site for values.
Zestimates will always be off on the high end / low end properties as the individual characteristics of these affect value much more than a traditional tract home. You could get three licensed appraisers on a high-end home and each will come up with a different value.
Here is where most the real estate sites fail in my opinion….
“Zillow lists only 400,000 homes that are for sale, out of about 4 million nationwide. A deal with real-estate publisher Network Communications will bring that total to 900,000. Trulia, in comparison, has 2 million.”
The reality is there is about 4.5 million listed homes according to NAR, then there is another 800K new homes for sale and then there is probably about 1 million homes are for sale by owner. The listing pie is probably closer to 6 million listings. The biggest site, Realtor has maybe 3.8 - 4 mill listings (and will never have the FSBO) of about 67% of total listing inventory, T has maybe 33% and Z even less.
As consumers making the largest investment decision all using may make it difficult to make an “investment” decision if you only see 50% of your available options? Imagine a Schwab that only offered 2500 stocks to pick from?
This sites will also face competition as R seems to be ramping up its efforts with a new beta and more SEO and the brokerages / franchises themselves will probably begin doing the same.
RESO has made every effort so far (initiating most of them) to reach out to GZTY to understand their needs for a “standard listing distribution format”. Anyone who states that RESO cannot or will not discuss modifying the listing schema to accommodate their needs, has not approached the RESO Board. In my opinion, RESO has not been given the chance to evaluate GZTY’s requirements for incorporation into the standard, if they do not already exist.
Good on you, Zillow!, Keep on grinding. Judging by the comments from the technorati here, Zillow is totally misunderstood. Hey guys- Zillow is the first and only site in the RE space that is targeted at the SELLER, the homeowner whose money funds that big huge juicy gazillion dollar market that all the nerds have convinced VC’s that they have the answer with their sexy technological disintermediation strategery. Guess what? Zillow owns the long tail with nobody else even a close second.
As a real estate professional who primarily lists homes for sale for a living, I welcome those Zestimate discussions with homeowners, you see, I know who has the parking, the Viking 6 burner range, the exotic hardwoods, and I am perfectly postioned and prepared to market those homes and all their unique features. You see, Seattle, a home is not a plane ticket.
I’ve always found Zestimates in certain areas of Los Angeles to be way off the mark. However, with this newest updates it seems like they’ve got it pretty close, at least in the couple locations I tried.
@Thomas -
“Zillow is the first and only site in the RE space that is targeted at the SELLER”
not really… June 2000 - Domainia.com - here is a snap shot from then.
http://web.archive.org/web/200.....ainia.com/
I do agree that Z is great to open up discussions regarding true value.
Zillow is a perfect example of what happens to a great idea under a large pile of money. They had a wonderful opportunity to provide a valuable service, unfortunately in order to pay for the money they already have on top of them they will need to fill most of the finite viewable space on their site with advertising. Hopefully they will be able to overcome their funding success.
The main issue with Zillow and Zestimates is a basic property of statistics.
If you look at their aggregate data (trends, etc), they’re pretty impressively good. But if you look at any one data point, they’re inevitably pretty bad. The rub is that their business model and what their users look at is all about individual data points (single properties), which highlights the worst aspect of their data, rather than aggregate trends, which would highlight the best.
It’s a tricky situation.
I’m surprised nobody has commented on Zillow’s massive re-assessment in the LA marketplace, and probably everywhere, a week ago.
Case in point, the house I currently rent was Zestimated at $631K in October 2006, $606K in September 2007, $577K in December 2007, and now it’s $970K as of January 3, 2008. (See, down is up!)
The comps listed were geographically so far from anything close to my neighborhood, I had to coddle my own comps (with the help of Homeseekers) for the period since July 2007 and came up with $875K, $935K, and two almost impossible to find (which I’m sure Zillow tried to bury to artificially bouy their figures), $684K and $811K. Which gives me an average of $825K for sales between July and December. If Trulia’s average price-to-square footage is accurate, I should be in the $603K area; Homeseekers/Cyberhomes puts this home’s value at $672K (very close to the $684 actual sale in September.)
My take on all of this is that Zillow anticipates the market continuing to plunge, so by raising their Zestimates, they can keep their core seller clientele happy while sliding their Zestimates down over the ensuing year. We buyers, relying on Cyberhomes, Trulia and MLS, won’t buy this year until Zillow and sellers are back on planet earth after they all chase the market down. 10% off? By my calculations, Zillow is at least 14% over comps, and 30% off what any sane person would truly value the house at today (and that’s before this year’s inevitable plunge.)
Incidentally, there has been zero upgrade on this house since it’s birth in the late 50’s. The county assessor’s values this home at $331K.
The most valuable information for a quick assessment? Average Price vs. Living Area on Cyberhomes/Homeseekers got it close to right for what the market is doing today ($800-835K); or Zillow’s low end of the Value range and knock of 5-10% ($820.) But the actual worth of the house? Anything over $700K (today) for this house is craziness (today’s Zillow’s Market Value Chart on January 2004 value.)
I personally wouldn’t spend a dime over $625K.
never thought this would ever take off when it first came out but I was wrong.
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http://www.xencasino.com
Like New York, Zillow is less than ideal for a market like San Francisco. There are way too many unique properties here that on paper seem similar until you walk inside. Even a home/condo right next to each other could be identical on paper, but completely different in reality. This is a great concept for markets where there are tons of tract homes. Phoenix, Reno, Las Vegas, places like that come to mind.
I, too, was/am a doubter of whether Zillow will succeed in the long run, but joining forces with bigger players certainly can help. Still have my doubts.
I do wish those Zillow bloggers would pay attention to mine though…they might learn a thing or two about SF.
thefrontsteps.com
They’re beefing themselves up so they can compete with trulia. Very smart.
I have found that zillow property estimate are way off base and change daily in Atlanta. Its nice to think that my home is worth that much but mmm sorry its not.
this Site
http://www.intownlandlord.com
Good luck with timing the market.