Forbes Retracts Faulty Zillow Stats
What We All Knew: Zillow's Numbers Are Innacurate
On April 05, 2010 Forbes magazine sent Denver Realtors through the roof. They claimed that Denver metro was the second worse real estate market in the U.S. That's devastating. It's also a pretty remarkable fall from grace, too. It was only a few months ago Forbes.com reported that Denver is the best city to buy a home based on positive real estate market fundamentals. So, why the discrepancy? Turns out, they used faulty statistics from Zillow. Tsk, tsk Forbes. Everyone knows not to count on Zillow. Right?
As soon as the article hit the virtual news stand, Denver real estate professionals cried foul… as did brokers from other metro areas. One commenter labeled, “jcovert”, posted stats from Metrostudy that showed a difference of nearly 20,000 homes on the market. That’s a 50% reduction and a staggering margin of error. You can imagine other reactions to this article. Even Mayor Hickenlooper reacted.
“It was hard for me to imagine we could have gotten into such a desperate environment without anybody noticing, and without me hearing about it,” says Hickenlooper. “When I first read the story I talked to brokers who said a year ago we had a six-month supply of homes and now we have a five-month supply, so we’re actually doing better.”
Now, 2 weeks later, Forbes printed a correction. After speaking with Zillow directly, Forbes has stated they will no longer use these stats from Zillow,
“Since Zillow has acknowledged that these numbers may have been artificially increased, Forbes.com has decided to limit the use of year-over-year homes-for-sale statistics from the data provider. “
Good for Forbes and thank you for doing the right thing! Unfortunately, Forbes learned a lesson that we all had to learn - Zillow is not accurate.
For example, by Zillow’s own estimate, their accuracy for estimating home values in Denver is +/- 12%. That’s a pretty serious margin of error and they clearly state on their website that their numbers may not be accurate. Zillow also admits that their numbers cannot consider home improvements or the psycho neighbor who lives next door.
Concerning the erroneous data provided to Forbes,
“It can be difficult to derive any assumptions about market conditions from the year-over-year numbers…” - says Zillow Spokesperson, Katie Curnutte
This Forbes article really speaks to a key issue for consumers: don’t get your real estate stats from the media. Find a licensed real estate broker you can trust. Brokers have access to the most recent, most accurate data and can give you a much better picture of the real estate market.
Regards,
