I confess to being a bit of a residential real estate voyeur. Like others of my ilk, I sometimes browse the real estate listings in my neighborhood or town just to get a sense of what’s out there. I’ve used Realtor.com and ZipRealty, among others. I’m still waiting for the internet to become the great equalizer for the consumer. Standard broker commissions haven’t gone down much, as far as I can tell, although fee-for-service arrangements appear to be more common, and DOJ is currently prosecuting an antitrust suit against the National Association of Realtors for its “blanket opt-out” rule, which enables traditional brokers to inhibit online brokers from providing complete MLS listings to their customers.
It was interesting to see Zillow, a relatively new real estate website, as the subject of a recent Fortune cover story. Zillow is trying to innovate, to go above and beyond the basic internet listing site. It is intensely data-focused, unlike most real estate sites. It aspires to collect and analyze lots of data on every house in the nation, in order to be able to offer accurate valuations across the board. The site collects publicly available information on each home, and also allows a homeowner to update existing information on her house. Zillow’s proprietary valuation algorithm calculates a “Zestimate” of the value of each home once enough data has been obtained. Apparently, much or most of the data used to Zestimate a house are publicly available. It’s another nice example of the power of the internet to aggregate “small” information—lots of little bits of data, each piece of which may be useful to only a handful of people, such that collection, analysis, and dissemination just wouldn’t be cost-effective pre-internet. (See here for another example).
Zestimates are far from perfect, of course, and there are lots of parts of the country where Zestimates are either unavailable or way off. To its credit, Zillow gives statistics showing Zestimates coverage (as a percentage of all houses) in major metropolitan areas, as well as ratings and statistics on Zestimates’ accuracy in each market, including median error as a percentage of selling price and percentage of Zestimates within 10% of selling price.
The site also has amazing “bird’s eye view” photos of houses from multiple perspectives. They’re taken from fairly close up—much better, say, than Google satellite photos. I can actually “walk” down the street of my childhood home, identifying each house on the street. Another interesting innovation is the Make Me Move option, which allows a homeowner to effectively announce to the world the price at which she’d be willing to sell, without actually going to the trouble and cost of a formal listing. Potential buyers can email the owner via the website. I was a little surprised at how popular this Make Me Move tool is. There are several hundred Make Me Move homes in Atlanta, and almost 70,000 nationwide.
Some of the navigation, especially map searching, seems less slick than other sites like ZipRealty. But Zillow seems to have an interesting approach to aggregating information about residential real estate. Back in January '06, BW asked the question, Zillow.com: How Scared Should Brokers Be?
Worth a look.
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