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Zillow newest addition to booming real estate space

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If you're a homeowner in the crazed Bay Area real estate market, chances you're at least a little obsessed with the value of your home. Which means you might find it hard to resist Zillow.com, at least once anyway. After a fair bit of anticipation, the Seattle start-up came out of stealth tonight. It's aim is to help people value homes.

Type in an address, and Zillow's algorithm crunches the home sales, tax assesor and other data it has and returns what it calls a Zestimate. We tried it on our home and it didn't seem far off. The site also shows the values of surrounding homes, which are displayed on an aerial map. Zillow can also show "comps,'' or the sale prices of homes that are comparable to the one your interested in.

Zillow obviously can't match a home's value exactly every time. So it offers a page that rates its accuracy for different areas.

"I've been jumping up and down about online real estate for a long-time,'' said Richard Barton, Zillow's CEO. "A lot of information, people should be able to get themselves. We were kind of surprised when we dug in and saw what's available.''

Barton said focus groups showed that people want to know what houses are worth, "and that there weren't any good tools to track this....Our goal is to give a birds-eye view of any market.''

Zillow's been on a lot of people's radar for a couple of reasons: The online real estate space is suddenly hot (see here and here). And Zillow's launching big, with 75 employees and $32 million in backing from two venture-capital firms, Benchmark Capital and Technology Crossover Ventures. Barton himself is a notable Internet name, having founded the Expedia travel site, later sold to IAC/InterActiveCorp.

It's also worth noting that Barton is a venture partner at Benchmark, and spends a fair amount of time down here in the Bay Area. He's also on the board of NetFlix and AtomShockwave.

So what's the business model? Advertising. Zillow is banking on being able to sell highly targeted advertising to the industry and anyone else who wants to be in front of homebuyers and sellers.

With 75 employees and a $32 million investment, Zillow is going to have to sell a lot of advertising. But the site has national coverage, which could translate into lots of page views.

"The great thing about Web 2.0 is that if you can attract an audience, advertising works,'' he said.

UPDATE: The Seattle PI has a lengthy write-up here. And smaller start-up PropertyShark.com debuts and zings Zillow.


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Comments

The site appears to be down right now. I get this asinine message after trying to do a search: "Zillow at rest. Zillow is catching zillions of data points to feed our Zestimate. (We'll be back online as soon as we're ready)"

Not a good way to start.

Greg Linden on February 8, 2006 7:17 AM
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Site is very cool. They are changing the game by giving consumers views into data buried in counties' offices. Advertising is not enough of a market though (expectation $600M by 2010).
So they either sell it to Google / Yahoo (the big advertising networks) for a few billions, or they get in for sale by owner once they have a lot of traffic.
The data access is their competitive edge, and many of the competitors are just not structured to catch up...

Yann on February 8, 2006 8:18 AM
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I have to question the accuracy of the site a bit.

Their methodology appears to be that they assume the last sale of the home was at fair market value, regardless of what it was sold at. Then the house value goes up or down along with the rest of the neighborhood. There's no (or at least very little) accounting for the fact that the last sale may have been significantly above or below fair market value. I can't verify that's their methodology, that's just what it looks like, I could be wrong.

Regardless, at least in our neighborhood, they show property values as having doubled over the last two years. That doesn't foot with publicly-available information I've seen. Prices have gone up, but not doubling over two years, at least not the last two years.

Furthermore, I went through and clarified several minor items about the house (# of bedrooms, roof type) that shouldn't have had a major impact on the home value, since none of the values I put in are out of the norm for our neighborhood... And it added $900k of value to the home. That's just silly.

So take it for what it's worth. Still a nifty site with lots of fun features.

Rob on February 9, 2006 10:13 AM
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What a waste of time. The site is always down. Probably being used because of TV commercial. That is why I am trying to access the website. Oh well.

memory.j on February 10, 2006 11:22 PM
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Home values are off in Nevada anyways.

scottinvegas on February 11, 2006 1:28 PM
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Home values are very off in San Diego ....

ryan martin on February 14, 2006 7:21 PM
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Zillow's zite means ZirroW...juZ vanity of vanities.
Zillow's right, it's juz a bird's eyeview.
It helps juz a little bit but of course I'd rather trust actual and live comps presented by real estate agents when it's time to sell.

Joe Xix Pack on February 15, 2006 2:14 PM
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Zillow is way off and each house is unique. You may have a crazy neighbor and have to disclose that to the seller. That info alone will affect how much you can get for your house. There's 1000s of other things that can affect the price of your home. The best thing to do is to find a very good Realtor who can run a comparative market analysis on your home and who works with good lenders who work with good Appraisers.

Zillow is only good for entertainment and is VERY off. Even if they were closer to the true value, they would still be off because each piece of real estate is unique, even if it's in the same condo complex!

Dave on February 15, 2006 9:12 PM
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Nothing to zcream about, lol. everything is not accurate, it just looks good. nothing new. but they must have wonderful pr agents, wonder what they did to get that much word out.

local business search on February 15, 2006 11:31 PM
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http://www.HomePriceMaps.com gives zillow a run for its money

homepricemaps on February 17, 2006 10:34 AM
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what do people think about the accuracy of http://www.HomePriceMaps.com

I use http://www.HomePriceMaps.com to search for realty prices by zipcode and/or city. Also-if you don't see any data for your area you can email them your info and they will quickly post home data for your area and email you within a day or two. pretty convenient.

PropertyMaps on February 23, 2006 3:13 PM
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Not accurate at all in fact you'd be a fool to trust this site for pricing your home.

Does not give any value for views or lake front homes. Does not take into account home well maintained. Every home I put in came up below market value or recent appraisals.

Home values by realtor have always been a free services and at least they know the area.

Another site looking for advertisers and to refer you to a realtor for a fee to the agents, just another gimmick.

Facts agent sold homes sell for 20% above FSBO so do the math that 14% higher than your commission.

Just like the insurance industries moved in between the doctor and the paient these guys want to get between the agent and the client for money.

joe blow on February 27, 2006 4:52 PM
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