{"id":497,"date":"2006-10-02T20:18:40","date_gmt":"2006-10-03T03:18:40","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=497"},"modified":"2007-04-01T10:10:26","modified_gmt":"2007-04-01T17:10:26","slug":"appraiser-reverse-engineers-zillowcoms-secret-sauce-can-you-guess-the-main-ingredient","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/497\/appraiser-reverse-engineers-zillowcoms-secret-sauce-can-you-guess-the-main-ingredient\/","title":{"rendered":"Appraiser reverse-engineers Zillow.com’s “secret sauce”: Can you guess the main ingredient . . . ?"},"content":{"rendered":"

Lee Ovington, a real estate appraiser who works and blogs in Elgin, IL<\/a> has successfully reverse-engineered Zillow.com’s Automated Valuation Method:<\/p>\n

The above examples give us some indication of how Zillow arrives at its value estimates (or Zestimate). Quite simply, the Zestimate relies on a calculated relationship of assessed value to sale price. Zillow merely takes selected transactions and calculates the relationship between the Assessed Values and the Sales Prices. It then applies that ratio to the subject’s assessed value (plus or minus some adjustments) and “whala”, you have Zestimate! <\/p>\n

The above examples show that even when Zillow has a large margin of error in its Zestimate of 10-15%, the Zestimate is still highly correlated with the Assessor’s Values. We can conclude from this analysis, that the Zestimate is a derivative of the Assessor’s Values. Zillow may be slightly modifying the data by some weighting or factor like time or distance. That “tweaking” of the data could be the “secret” part of its formula; but clearly, the Zestimate is based on the underlying Assessor’s Values as indicated by the high correlation coefficient.<\/p><\/blockquote>\n

This is not surprising, by itself. It’s how AVMs work, after all. But by deconstructing Zillow’s results, Ovington demonstrates how little<\/i> sauce there is in the vaunted “secret sauce”…
\n<\/p>\n

Technorati Tags: blogging<\/a>, disintermediation<\/a>, real estate<\/a>, real estate marketing<\/a><\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Lee Ovington, a real estate appraiser who works and blogs in Elgin, IL has successfully reverse-engineered Zillow.com’s Automated Valuation Method: The above examples give us some indication of how Zillow arrives at its value estimates (or Zestimate). Quite simply, the Zestimate relies on a calculated relationship of assessed value to sale price. Zillow merely takes […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,4,6,5,25],"tags":[],"class_list":{"0":"post-497","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-blogging","7":"category-disintermediation","8":"category-marketing","9":"category-real-estate","10":"category-zillowcom","12":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":307,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/307\/incremental-movement-toward-a-blanket-zillowcom-disclaimer\/","url_meta":{"origin":497,"position":0},"title":"Incremental movement toward a blanket Zillow.com disclaimer?","author":"Greg Swann","date":"September 8, 2006","format":false,"excerpt":"Today brings a game effort by David Gibbons of Zillow Blog to address Zillow.com's disclosure\/disclaimer issue. The problem for me is that the material he cites is at least one click deeper than where he puts is and two clicks deeper than where it should be. Even worse, the page\u2026","rel":"","context":"In "Blogging"","block_context":{"text":"Blogging","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/blogging\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1344,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1344\/amended-arizona-appraisal-bill-fails-to-pass\/","url_meta":{"origin":497,"position":1},"title":"Arizona appraisal bill, amended to permit AVMs such as Zillow.com to operate in state, fails to pass","author":"Greg Swann","date":"April 25, 2007","format":false,"excerpt":"Arizona SB 1291 failed to pass Tuesday afternoon in the Arizona House. The bill would have required a two-thirds majority and passed by less than that. I'll post further when I know more. Further notice: Here's what it all means: To have passed, the bill would have had to have\u2026","rel":"","context":"In "Disintermediation"","block_context":{"text":"Disintermediation","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/disintermediation\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":356,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/356\/zillowcom-bites-the-wrong-bullet-in-preference-to-telling-one-simple-truth-it-will-propagate-thousands-of-tiny-lies\/","url_meta":{"origin":497,"position":2},"title":"Zillow.com bites the wrong bullet: In preference to telling one simple truth, it will propagate thousands of tiny lies . . .","author":"Greg Swann","date":"September 20, 2006","format":false,"excerpt":"Here's a simple fact, one of the most important reasons why homeowners need professional representation to market their houses: Diogenes himself could not find an objective seller. It's not enough to detail everything that's wrong with the neighbor's homes, the more important job, in a listing appointment, is to tell\u2026","rel":"","context":"In "Blogging"","block_context":{"text":"Blogging","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/blogging\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":3344,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/3344\/as-good-as-a-link-how-would-you-like-to-co-brand-with-zillow\/","url_meta":{"origin":497,"position":3},"title":"As good as a link: How would you like to “co-brand” with Zillow?","author":"Greg Swann","date":"July 9, 2008","format":false,"excerpt":"Do you want to see something huge in the guise of something that might seem quite small at first? Click here. This is new software from Zillow.com. It's supposed to go live at 9 pm PST, but it's already working for me. What's different? Look up in the upper left\u2026","rel":"","context":"In "Disintermediation"","block_context":{"text":"Disintermediation","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/disintermediation\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":2483,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/2483\/zillowcom-cultivates-its-garden-with-ten-million-new-database-records-improved-home-valuation-algorithms-and-the-adoption-with-truliacom-and-other-realtybots-of-the-rets-listings-standard\/","url_meta":{"origin":497,"position":4},"title":"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","author":"Greg Swann","date":"January 9, 2008","format":false,"excerpt":"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\u2026","rel":"","context":"In "Disintermediation"","block_context":{"text":"Disintermediation","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/disintermediation\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1256,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1256\/greg-peeing-on-the-tree-2\/","url_meta":{"origin":497,"position":5},"title":"Zillow.com’s press release detailing added functionality in new software release","author":"Greg Swann","date":"April 3, 2007","format":false,"excerpt":"Zillow.com\u2122 Launches Home Q&A \"Ask Questions, Share Answers\"at the heart of numerous new features harnessing knowledge of agents, homeowners and neighbors Seattle -- April 4, 2007 -- Real estate Web site Zillow.com today announced the launch of Zillow\u2122 Home Q&A, among other new features aimed at further opening the site\u2026","rel":"","context":"In "Marketing"","block_context":{"text":"Marketing","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/marketing\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/497","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=497"}],"version-history":[{"count":0,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/497\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=497"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=497"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=497"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}