Disappointing Unique Users for August - has Zillow run out of steam?
Despite $'millions being invested on a TV advertising campaign this summer the increase in monthly Unique Users for Zillow was a disappointing 3.9% from July's 61.3M to Augusts 63.7M. Hardly a stellar performance from a supposedly high growth stock which ambitions to dominate the real estate market. And when you take into account that Spencer Rascoff the CEO admits that Unique Users are not actually unique as people accessing from multiple devices and IP addresses are counted multiple times for each device they access Zillow. So the accuracy of this key 'business metric' is as flawed as the nonsense Zestimate algorithm that has more than 17% of 110 million homes on Zillows 'living database of homes' incorrectly valued by more than 25%.
How many of the people accessing Zillow are just checking how erroneous the Zestimate on their home is, and not consumers of any advertising or any Zillow services? I am one of many and that is something that the Analysts should be aware of. One answer must be to correct substantially incorrect Zestimates when brought to Zillows attention so that the huge amount of negativity about Zillow is reduced. What other large company treats consumers so badly and seems to think that imposing nonsense information is a good idea when actually alienating so many people that it will be impossible for Zillow to grow its market position beyond its current level.
So the slowing growth witnessed in August was a gentle lead into the slump in UU's for September. No doubt there will be a bunch of inane excuses for this when the 3rd Quarter earnings are announced on November 4. With a drop of 5.3 million Users in one month the question has to be how much lower will the user numbers drop in October and November as the home buying season slows down for the holiday season.
Yes I am still here and will continue to share my opinion on Zillow whilst they continue to impose a nonsense Zestimate valuation on my home. The day they correct or delete it I go away. Just to demonstrate how inaccurate Zillow is in my neighborhood there have been two home sales in recent weeks, and both sold for 10% more than the Zestimate. Yesterday Zillow increased the Zestimate on one of these homes by $61K, and on the other home by $36K, and the 'revised' Zestimates are still inaccurate based on selling price by $16K and $34K respectively. The algorithm is fundamentally flawed and Zillows refusal to correct Zestimates when highlighted as being substantially incorrect is no more than cyber bullying. It is time that this nonsense was subjected to some form of Regulation to protect homeowners from misery and financial damage caused by websites like Zillow.
I own two homes. One is definitely worth LESS than the zestimate, the other is PROBABLY worth less than the zestimate. Some people have an inflated idea of what their home is worth. But unless you plan to sell or refinance, it doesn't really matter what ANYBODY estimates the value of your home to be. All that matters is what it will sell for. If you think that an on-line estimate, or even a city appraisal, has a substantial effect on the value of a home, then you don't know much about real estate.
Well lucky you that you are one of the 'statistical winners' of Zillows nonsense Zestimates. I have no intention of selling my home for many years and have no need to refinance, BUT that still doesn't make it acceptable that Zillow under values my home by more than $100k and refuse to correct or delete the erroneous Zestimate when brought to their attention.
When almost 20 million US homes are inaccurately valued by an online real estate business that claims it is the market leader with 63 million monthly users, then it is a serious issue that homeowners have misery and potential financial damage inflicted with absolutely NO recourse. That is against all principles of a fair minded society and it is time that our elected officials implemented some form of Regulation against AVM companies like Zillow. It would be very simple to introduce a DoNotZestimate website similar to the DoNotCall site where phone users can register their number to stop pointless spam calls. That happened because there is a Telecoms regulator and we need the same Regulation over imposed inaccurate home valuations urgently.