Comments on: Accuracy of Zillow Statistics http://bellinghamrealestate.wordpress.com/2007/08/19/accuracy-of-zillow-statistics/ A blog about Real Estate in Bellingham and Whatcom County Thu, 27 Aug 2009 13:38:26 +0000 http://wordpress.com/ hourly 1 By: David G from Zillow.com http://bellinghamrealestate.wordpress.com/2007/08/19/accuracy-of-zillow-statistics/#comment-73 David G from Zillow.com Fri, 14 Sep 2007 20:18:59 +0000 http://bellinghamrealestate.wordpress.com/2007/08/19/accuracy-of-zillow-statistics/#comment-73 Hi Michael, Sorry for my delay in getting back here. The Zindex is not susceptible to the scenarios I listed because it considers how the values of *ALL* homes have changed - not only the subset of homes that recently sold. The accuracy of the Zindex is not negatively impacted by a change in for sale inventory whereas the median sales price is. Median sales price actually tells you nothing about general house values; it just tells you about the values of the homes that recently sold. Hi Michael,

Sorry for my delay in getting back here.

The Zindex is not susceptible to the scenarios I listed because it considers how the values of *ALL* homes have changed – not only the subset of homes that recently sold. The accuracy of the Zindex is not negatively impacted by a change in for sale inventory whereas the median sales price is. Median sales price actually tells you nothing about general house values; it just tells you about the values of the homes that recently sold.

]]> By: Michael http://bellinghamrealestate.wordpress.com/2007/08/19/accuracy-of-zillow-statistics/#comment-67 Michael Tue, 21 Aug 2007 22:44:12 +0000 http://bellinghamrealestate.wordpress.com/2007/08/19/accuracy-of-zillow-statistics/#comment-67 David, You say that " The median sales price of homes that recently sold is a statistic that is easily skewed by a change in the inventory that is selling — and so it isn’t a perfect measure of average house values." What makes your approach any better than looking at the actual values of recently sold homes. All 3 of your reasons for the difference may or may not apply to Bellingham, but that doesn't help explain why you zindex or zestimate is a truer or better picture of the market David,
You say that ” The median sales price of homes that recently sold is a statistic that is easily skewed by a change in the inventory that is selling — and so it isn’t a perfect measure of average house values.”

What makes your approach any better than looking at the actual values of recently sold homes. All 3 of your reasons for the difference may or may not apply to Bellingham, but that doesn’t help explain why you zindex or zestimate is a truer or better picture of the market

]]> By: David G from Zillow.com http://bellinghamrealestate.wordpress.com/2007/08/19/accuracy-of-zillow-statistics/#comment-64 David G from Zillow.com Mon, 20 Aug 2007 16:51:36 +0000 http://bellinghamrealestate.wordpress.com/2007/08/19/accuracy-of-zillow-statistics/#comment-64 Hi, it's David G from Zillow, It's quite normal that Zillow's trend reporting can differ from MLS sales trends. It's also unlikely that FSBO's account for that difference. Zillow's trend statistic or "Zindex" measures the change in the median value of all homes in your area whereas the MLS only reports the value of homes that were sold in the period in question. In a market where the mix of homes that are being sold is changing these two statistics won't agree. The median sales price of homes that recently sold is a statistic that is easily skewed by a change in the inventory that is selling -- and so it isn't a perfect measure of average house values. And there are no perfect statistics so it's a good idea to use a few different approaches and then synthesize the results based on an understanding of how they're calculated. I'm not an expert in the Bellingham real estate market. If the Zindex is flat or decreasing while the median sales are increasing there would be a number of possible reasons for that. Do any of the following apply to the Bellingham market; 1) The demographic of homeowners moving into the area is wealthier than that of existing residents. 2) Demand for homes on the lower end of local property values has slowed down or availability of low end property has dried up. 3) New development is focused on higher end homes (>$300K). I hope that helps. David Hi, it’s David G from Zillow,

It’s quite normal that Zillow’s trend reporting can differ from MLS sales trends. It’s also unlikely that FSBO’s account for that difference. Zillow’s trend statistic or “Zindex” measures the change in the median value of all homes in your area whereas the MLS only reports the value of homes that were sold in the period in question.

In a market where the mix of homes that are being sold is changing these two statistics won’t agree. The median sales price of homes that recently sold is a statistic that is easily skewed by a change in the inventory that is selling — and so it isn’t a perfect measure of average house values. And there are no perfect statistics so it’s a good idea to use a few different approaches and then synthesize the results based on an understanding of how they’re calculated.

I’m not an expert in the Bellingham real estate market. If the Zindex is flat or decreasing while the median sales are increasing there would be a number of possible reasons for that. Do any of the following apply to the Bellingham market;
1) The demographic of homeowners moving into the area is wealthier than that of existing residents.
2) Demand for homes on the lower end of local property values has slowed down or availability of low end property has dried up.
3) New development is focused on higher end homes (>$300K).

I hope that helps.

David

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