As an appraiser, I have some familiarity with Zillow and other artificial valuation models. They don’t produce appraisals as we define an appraisal, but they do provide information and as we all know information can be a powerful tool when used well.
Inasmuch as this type of information has not been as readily available in an easy format at the consumer level, I think that as time goes on and more people learn how to use the information well it could have a significant impact on how these trends unfold. For instance, if after suffering a big decline in values it becomes apparent to people that they could have avoided their losses in the first place by following the blogs and keeping up on the information, it could serve to stabilize our cycles somewhat by alerting people to where the prices are in relation to the historic trends. I mean, if people realize that once prices decline past the trendline it becomes safer for them to buy those trendlines will serve as triggers. If enough people came to that conclusion it could prevent the market from sliding too far into the red. Likewise, if people realize the prices are getting too far ahead of the trend it might cause *some* people to hold off, depending on what their motivations for purchase are.
If you were to ask appraisers about this current trend you’d find that most of them believed it got crazy 3 or 4 years ago – hardly any of them were buying then because they recognized the high point for what it was. That’s the result of having the data and the tools to analyze that data; and it’s an effect that could possibly trickle down to the masses as the information becomes more available and the tools become easier to operate.
That is, unless I’m being too optimistic about the intelligence of the masses.
