Yeah I know, I’m way behind the curve on this one (that’s what I get for starting a new job), but it doesn’t really directly relate to a bubble, other than perhaps being an interesting way to watch things go down. Anyway, as you surely know by now, the much-hyped, formerly super-mysterious, Zillow.com is now live.
After more than a year of keeping tight wraps on his heavily funded startup, former Expedia Chief Executive Rich Barton today will disclose how his 75-person company, Zillow.com, plans to transform the multibillion-dollar real estate business.
The idea: Place a real-time value on homes throughout the country.
“We think you shouldn’t need a computer science degree or a real estate license to find out what a home is worth,” said Barton, who hopes to do in real estate what he already accomplished in online travel.
With an assessment known as a Zestimate, Zillow.com takes into consideration historical property information, square footage, number of bedrooms, neighboring homes and other factors to determine estimated values of 42 million of the 85 million residences in the United States. It then overlays that information on aerial and satellite maps, so home shoppers from Miami to Seattle can get a better idea of the market value of homes in those cities.
That is to say, those are all things you could do, if you are lucky enough to be able to, you know, actually access the site. I guess all that hype paid off in a bigger way than they were prepared to handle, because as soon as they announced their arrival the Zillow.com server was brought to its knees.
Stories about the startup online real estate service in major U.S. newspapers — including The Wall Street Journal, The New York Times and Los Angeles Times — helped swamp Zillow’s servers throughout the morning and early afternoon. By 7 a.m. Wednesday, the company had already served up more then 300,000 pages. By 4:30 p.m., the total had surpassed 2 million.
“It is certainly a number higher than we thought,” Zillow.com spokeswoman Amy Bohutinsky said.
She said the newly launched Web site experienced “some capacity issues” because people lingered on the site longer and requested more pages than the company had planned. As an example, Bohutinsky said she heard from a friend who was viewing the home values of everyone on her Christmas-card list.
And thanks to Zillow’s failure to adhere to Boy Scout standards, this is all of Zillow that I can personally try out for myself:
Our apologies Due to overwhelming demand, some people are getting access to our beta site and some are not. We are working hard to make room for everyone.
Be patient… we know it’s tempting, but please don’t frequently refresh your browser. Instead, come back later.
A few of my coworkers were trying out the site and for one of them their house and others all around their neighborhood were “Zestimated” at hundreds of thousands less than they were sold for just months previously (though it’s arguable that perhaps Zillow was more correct than they know…). For the other, Zillow had incorrect information about the size of his house, even listing it as a one-story when it is in fact two-story.
I guess you can color me unimpressed.
(John Cook, Seattle P-I, 02.08.2006)
(John Cook, Seattle P-I, 02.09.2006)
Well, I have to say I AM impressed, even if the Zestimate isn’t that accurate.
At the very least, it’s a good way to see which homes in the MLS are being flipped. Amazing how many of the listings that came on the market this week were last sold in August 2005.
The site is attempting to assimilate a vast quantity of data and is bound to have a few bugs at the start.
I’ll wait a few months before passing final judgement.
Anon 10:39
Well let’s just hope those flippers get burned but good.
I think the market peaked here last August! Seriously!
I bounced around it for a few minutes yesterday. Very interesting. It’s zestimates in Seattle corresponded pretty accurately with what I think a house could fetch now, in most cases. I’m not talking long-term value, obviously, just current value.
I’ve been having problems using the Zillow site- maybe because I’ve got an old Mac.
Anyway, this site:
http://www5.metrokc.gov/reports/property_report.asp
is an awesome tool and very easy to use.
It gives the buy/sell history of each property and the tax valuations.
You can :
>compare asking price to actual selling price
>find out whether a property that went off the MLS list actually sold or was just taken off the market,
>see whether a property is a flip.
I found several properties, Asking Price in the 800K-900K range that were taken off the MLS list in Jan ‘05.
Turns out they had 1) not sold and 2) been bought a 1-2 years earlier for MUCH less money.
For example, one beautiful craftsman , good location, bought for 230K (what a deal!) in 2004. On the MLS this past fall for 799,950K. Delisted January 06, not sold.
To use the site all you need is the street address of the property you are investigating.
Used the above metrokc address and found a lot of huge price jumps.
Here are just a couple of the ones I jotted down:
1221 NE 103 St: Sold in 2004 for $230K
on MLS list Dec. 2005 for $799,950
11554 17 Ave. NE: sold on 11/18/2004 for 218,500.
On MLS Dec ‘05 for 699K
Both of these were pulled off the MLS in Jan ‘06.
Anybody who’s thinking of buying right now in Seattle should definitely check the history of the property they are interested in.
I see potential for some serious low-balling in the future!
I got to say I’m pretty impressed. This allows me to bypass Domania, which doesn’t work all the time. And the graph is certainly impressive considering you get to see the huge deviation in prices over the last 2-5 years compared to the last 10 years. Enough to stop any buyer in his/her path.