Jim the Realtor put up a post on Zillow over at his excellent blog, and I took the opportunity to ask about something that’s always stuck in my craw. To wit:
Here’s something that always bugged me about the zestimates. If you look at any SD property’s price history (or that of SD as a whole), it basically shows the price going pretty steadily up through 2003-4 and then skyrocketing in the first 6-9 months of 2005.
This isn’t how it happened at all, though… the Case Shiller indexes (and pretty much all other data sources too) indicate that the parabolic blowoff phase happened in early 2004, not early 2005. And yet, Zillow has always showed this obviously incorrect pricing history. Anyone have an idea as to what’s going on there? Since they seem to be talking up their accuracy, why have they made no attempt to fix this obvious and quite substantial inaccuracy?
Just for kicks I put together a chart to show what I was talking about:
Jim thinks that the distortion was caused by a bigger drop in low-end than high-end sales. It’s hard to believe that effect could account for such a glaring error, especially considering that the volume disparity between low and high priced homes became much wider later on. But I don’t have a better explanation for what’s caused the discrepancy — or why they haven’t fixed it. Any ideas?