Some of you may have heard the recent news about Zillow. I’ve made videos about their various online services in the past and how they affect the market, but I wanted to talk about this most recent one.
Zillow had been using their Zestimate to make offers on homes the AI told them would be a good value. It tried to factor in appreciation, the cost of repairs, and the cost to sell. They had been doing this for a while and had become a big real estate company. However, they announced that this fall that they would put it on ice and analyze what went wrong.
We always knew Zesitmates were unreliable, but now history proves it.
One source I had said they were losing around $80,000 a house. Fairly recently, they announced that their whole iBuyer platform, as these sorts of online cash offers are called, would be abandoned. That caused quite an uproar, and some of you might’ve seen that Zillow’s stock dropped 25%. Also, around 25% of their employees were laid off.
We’ve always talked about Zestimates being unreliable. Zillow admits this themselves because they have a state-by-state reliability chart below the page that gives the Zestimates. History now shows that the best source for your home value is a person who can keep their finger on the pulse of the market.
I hope this was interesting and helpful. There’s probably more news to come about this whole situation. If you have any questions or are looking to buy or sell, feel free to call me.