Zillow.com cultivates its garden with ten million new database records, improved home valuation algorithms and the adoption, with Trulia.com and other Realty.bots, of a RETS-compatible listings standard

by Greg Swann

Suburban Phoenix Real Estate Broker

Author website

First the news on horseback. We’ll come back and gloss it again, but you’re likely to learn more by listening to the podcast linked below with Zillow.com’s David Gibbons.

The news, from Zillow’s press release:

Real estate Web site Zillow.com today announced a major expansion and upgrade to its database of nearly all homes in the country — increasing data coverage from 70 million to 80 million U.S. homes in 48 states, or 88 percent of all homes in the country. Zestimate values are now available on three out of four U.S. homes, or 67 million, up 68 percent from when Zillow launched in 2006. New areas with Zestimates include the states of Alabama, Arkansas, Delaware, Iowa, Idaho, Indiana, Kansas, Kentucky, Louisiana, West Virginia and New Hampshire.  

Zillow today also announced it has dramatically expanded and improved its Zestimate algorithm, incorporating 20 times the number of statistical models than before that factor in more local and home-type variables and now integrate homeowner-edited home facts — such as the number of bedrooms, bathrooms or square footage. More than one million homes have been claimed and updated by their owners to date, contributing to improved Zestimate accuracy on many of these homes. Incorporating these changes along with continued algorithm upgrades have resulted in a 12 percent improvement in Zestimate accuracy nationwide. Many larger metropolitan markets, such as the greater San Francisco, Miami, Los Angeles and Atlanta areas, have some of the most significant accuracy gains at 18 percent, 21 percent, 22 percent and 28 percent respectively.

There’s more. This was leaked earlier this evening by TechCrunch.com:

The other big news is that Zillow is joining Yahoo Real Estate, Trulia, Oodle, Homes.com, Realestate.com, Vast.com and others in adopting a standard way for brokers and multiple listings services (MLSs) to send in their real estate listings in a feed format. That way brokers can use the same data format for all the different real estate search engines and Websites. It is called the Real Estate Transaction Standard (RETS). That should make it easier for brokers to propagate their listings everywhere. [*See clarification from Zillow’s David Gibbons in the comments below.]

This agreement, presumably brought about at the instigation of FBS Systems President Michael Wurzer, who last week wrote an open letter to the nascent Realty.bot industry to adopt the RETS standard, is expected to be formally announced at 8 am EST Thursday morning.

Locking down the news of the data-sharing agreement is funny, almost a parody of corporate behavior. When Michael Wurzer made his initial proposal, you could hear the chorus of “D’ohs!” nationwide. And while there is always a gap between dictum and factum, RETS is an eminently XML-able data standard, and all of the Realty.bots are already set up to eat XML. The upfront, one-time cost of revising a parser in exchange for an almost-infinite extensibility could not have required a lot of thought.

I bugged Michael Wurzer for a comment, and he offered this: “Standards produce more value the more they are used, and so we’re thrilled by these firms adopting standards for syndication to their sites. Brokers will have more choice and more efficiency, which is the core purpose of standards.”

Not everyone is as thrilled. We in Phoenix are about to adopt an FBS Systems MLS system, and Michael has already asked us if we would be interested in having our listings made available to Realty.bots like Zillow.com and Trulia.com, as well as listings aggregators such as Postlets or Oodle. I could not be more enthusiastic about this prospect, since I would be creating and maintaining one canonical record, with every other form of that record being derived from the original.

But I talked to an agent with a very large, very powerful brokerage tonight who worries that making data aggregation and dissemination easier at the brokerage level will end up costing Realtors money. “Instead of hand-tailoring my listings on Zillow, with my copy and my photo, my brokerage will be there with their contact information. Any leads will come to them, and some relocation company will be in a position to sell me back my own listing.”

In the podcast, you’ll hear David Gibbons talk about all the ways that Zillow has worked to improve the accuracy of Zestimates — better data sources, selecting more-nearby and more-closely-correspondent comparable homes, using the data supplied by owners and listing agents with respect to particular homes. The addition of ten million new homes is almost a side-effect of this effort. I myself have never been a Zestimate fan — very much the contrary — but clearly there will come a day when close enough is good enough — when the marginal cost of disputing a Zestimate will exceed that dispute’s marginal value. In the podcast, we talk about transactions where this must already be the case — where the cost of obtaining an appraisal would exceed any possible difference between the appraised value and the Zestimated value.

Even so, I don’t care. I have never yet had a client show me a Zestimate. It’s the rest of what Zillow does that is fascinating to me, and I confess that Zillow is as fascinating as an ant-farm to me: I just can’t tear my eyes away from what they’re doing. Like this:

Unlike most real estate sites, Zillow provides data, information and community features around all homes, not just those on the market today. In fact, 40 percent of all U.S. homes have been searched on Zillow since the site launched in “beta” form in February 2006. With this latest release and round of improvements, Zillow now comes out of its “beta” phase.

I had brutal fun at Trulia.com’s expense yesterday morning, and I don’t want to come off like I’m playing favorites. And I’ve given Zillow a lot of grief in the past, and no doubt I’ll be doing that again. But where Trulia seems to me to be striving to be the TV Guide, Zillow has within it the potential to be television itself, The Show, the all-encompassing everything. They understand the Cluetrain idea better than anyone, absorbing criticism with aplomb and using it as the fertilizer from which to cultivate their garden. Second Life is a toy. Trulia feels like a toy to me. Zillow is building a correspondent on-line avatar for everything that matters in residential real estate. In the long run, I think they will end up defining the virtual real estate world.

 
More: The press release from the triumphant triumvirate announcing the new uniform listing standard for Realty.bots and listings aggregators:

Leading online real estate companies Yahoo! Real Estate, Zillow.com, and Trulia.com today announced the adoption of a new standard data format for the distribution of real estate listings online. With this standard, real estate franchisors, brokers, multiple listings services, and other listings providers will be able to distribute their listings data to several of the leading real estate sites in one common format, making it easier to get critical information to consumers faster and more efficiently.

[…]

In addition to Yahoo! Real Estate, Zillow and Trulia, several other leading online real estate sites have agreed to adopt the standard, including Homes.com, Homescape, Oodle, Point2 Technologies, Realestate.com, Vast.com, and vFlyer.
 
[…]
 
The companies participating in the new standard will work in close collaboration with the Real Estate Standards Organization to ensure that the data specification interoperates with the Real Estate Transaction Standard (RETS).   

[…]
 
The data feed specification will be based on the XML format and will comprise all the requisite components of a listing, such as address, price, square feet, beds, baths, and additional descriptions of the home.  Where as today, brokers and listings providers would need to create upwards of a dozen different formats for one listing, the new standard model will significantly reduce the amount of time spent preparing the content for distribution online.
 
[…]
 
The participating companies plan to launch the standard feed format later this year. Brokerages and other listings providers interested in participating in this standard should contact the following: feedstandard@yahoo-inc.com.

 
Further notice: John Cook, TechCrunch, Jay Thompson, Jim Duncan, Kris Berg, Lloyd Frink, Tom Royce, Mike Price, Peter Chiu, Search Engine Land, Joel Burslem, Thomas Johnson.

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