Take one foreclosure or one short sale. Does that mean all the homes in the municipailtao go down in proportionatoa value? Current Zillow algoritmikao discounts everything of which Madam thinks is inaccuratao. Frankly, the current published numbers estimating the valore of a home by Zillow has very little use. In fact, most homes sell above Z's estimado.
Why do I think Zillow, and for that matter the stock, will become a commodity? Several reasons.
1. The home estimate value they publish is a fudged number, regardless of how it is derived. As the previous post stated correctly, could be off by 25%. As they recognize this number to have a little meaning/use, they will stop publishing this number.
2. When they stop publishing this number, the one and only one differentiator they have will end up with is the land/lot topology they display. How long will it take competitors to display the land layout? Not long. Then, there would be no need to use Zillow in particular since half a dozen web sites will display identical information.
3. Zillow was in litigation with appraisers for displaying this number, not sure if it got resolved or if it is still going on.
4. The only meaningful number for home value they can publish is limited to the assessor's published numbers. Again, this number is available for everyone so then why use Zillow in particular anyway.
5. In Madam's opinion, the Zillow stock hardly justifies a price of more than a single digit.
@ madam_hillary07 You are spot on with your analysis of Zillows flawed Zestimate algorithm which is a trailing indicator and is distorted by outlier transactions which then distort the whole neighborhood. They also don't seem to be able to distinguish between 'nearby but totally different neigborhoods', and consequently that leads to substantially inaccurate Zestimates as well. Add to that very poor data configuration control and it is hardly surprising that Zillow itself accepts that over 17% of 110 million Zestimates are more than 25% incorrect.
What other $3.5Bn Nasdaq company has a reputation for incompetence and inaccuracy on that scale? None that I can think of, so its all the more surprising why Zillow refuses all requests from homeowners to correct or delete an erroneous Zestimates. What have they to gain from publishing almost 20 million home valuation estimates that are over 25% inaccurate? is the next thing to charge homeowners a fee to correct nonsense Zestimates? is that part of Zillows revenue growth plan?