Arizona Daily Star Using Zillow For Reporting Source

Rebuttal and Analysis of Zillow as a Reporting Source

I have one question “What Could You Possibly Be Thinking“?   Did you let everyone at the paper go that knows how to do a fact check? Data analysis? or even apply simple logic? There were other more descriptive phrases that came to mind, but this gets the point across.

What are they thinking?   They are thinking a headline like: “34% of homes sold at a loss here in ’08 as values plunged” is a good headline.   I say it is irresponsible reporting on the part of the “Arizona Daily Star”

ZILLOW IS FOR FUN NOT FOR FACTS

Zillow Based Map for Tucson

I opened the “Arizona Daily Star” yesterday and I couldn’t believe what I was reading.

“A third of Tucson homes sold last year went for losses as foreclosures continued to drive down values in Southern Arizona, Seattle-based Zillow.com reported Tuesday”

Zillow being used as an authoritative data source is like using a quija board to predict the future. Zillow is for fun. That’s it. I said so back on 2006 and nothing has happened to change that conclusion.

Here is what the writer should have checked out before simply taking this so called “report” at face value and splashing it all over the front page of the “Arizona Daily Star”

What is the basis for this report

If you dig around on Zillow.com a while you will come to this 4th quarter report page.

Scroll down to where Tucson, AZ is and you will be able to download the Excel spreadsheet of the report.

From the spreadsheet the Summary Tab you will find the Report is based on Zestimate Values.

Zestimates are notoriously WRONG!   This is why they are not called estimates.   Because an estimate is usually based on something.   Zestimates are based on . . .   I’ve seen vacant lots with a Zestimate of over $300,000.   I’ve seen homes with a market value of $700,000 receive a Zestimate of $435,000.   And homes with a market value of $450,000 receive a Zestimate of $740,000.   Sometimes they are close, but close is only good for horseshoes and hand grenades.   When you are talking about Real Estate Values, close isn’t close enough. And I would say missing some properties by more than + or – $300,000 isn’t close.

Therefore, you can THROW OUT THE ENTIRE REPORT AS TOTALLY MADE UP DATA.

Where else the data goes Awry

It isn’t only the Zestimates where you will find issues with Zillow Data.   Because they are also basing some of this “reporting” on the “Sold data”.   I did a quick search of Pima County Solds for the past 12 months and quickly found these 15 sales     Here is the link to the search so you can see exactly what I saw.   Homes Sold in Pima County past 12 months for under $1000.   The first result is one of my favorites.

440 N. Placita Mira

Zillow Sold $1.00
Zestimate:$390,000

Actual Sale Price: $499,500

Difference between Zestimate and Sale Price: $109,500
Difference between Zillow Sold Price and Actual Sale Price $499,499

That is just one example,

9 of the 15 sold for $10
3 sold for $1
2 sold for $100
1 sold for $175

If I change the criteria to include Multi-Family Dwellings the number jumps up to 28 solds.

It only takes a single (ONE) invalid entry to skew an entire data set.

Garbage In Garbage Out

This is the rule of data.   This past two weeks I’ve contacted the Tucson MLS three times with sold properties that were entered with the wrong sale price.   We did not have a mobile home sell for 10 million dollars.   There also was not a sale for 56 million or 80 million in the past two weeks in Tucson.   But all of those were sold prices entered into the system.   While that data was active, no one could get an accurate Average or Median Sale price.   Add one zero   on a single sale and all the data for a report can be skewed and rendered worthless.   This is why I was reporting “UNKNOWN” for Average Sale Price.

The Tucson MLS fixes these data entry errors.   However, with places like Zillow they often do a single data pull.   If they pull data while there are errors they don’t go back and pull the data again.   What is there is what they get.   Where they got the $1, $10, $100 sales have to be after they received the data and were reformatting it for their purposes.   There were no such sale prices entered into the Tucson MLS System.   I check it daily.   Should one such sale be entered it will skew the data as much as entering a mobile home selling for 56 million.

All Zillow Reports based on Zestimates and Zillow Sold Data are WORTHLESS.   Zillow is ONLY for Fun, but it isn’t my kind of fun.   Please, please, please do NOT base any decisions about Tucson real estate or the Tucson real estate market based on Zillow Zestimates or Zillow Based Reports.   When you see any article in the Arizona Daily Star or anywhere else with Zillow as the data source.   TURN THE PAGE and move on it isn’t worth your time to read it.