Appreciate the response, and also the backup information on Zillow’s methodology.

My primary gripe with the concept of automated valuation algorithms is the perception they create that such analysis is useful on a house-by house basis. It’s not.

Data and AVM-type analysis is very helpful when it comes to examining broad trends, and even localized trends when the analysis is done correctly. But when you attached a value to a single home that’s generated automatically, it becomes misleading.

Having worked in the industry, specifically running a company where we sell property valuation analysis, I am acutely aware of the shortcomings of such techniques on a home-by home basis. Unfortunately, the general homebuying public is not.

I appreciate that Zillow has made the effort to exhibit transparency and explain your algorithms, but most homeowners understand the concept of how a trustee sale works and how that price may be different than a market sale no better than they understand the intricacies of a mortgage backed security. I believe strongly that to claim any ability, however transparent, to value a single home with a computer model is disingenuous.

As I said, I do appreciate your firm’s attempt to be self-critical and open about the shortcomings of the Zestimate, but it has become a bit of a phenomenon, and as such has gained credibility I do not believe is warranted.

Thank you again for the explanation, my goal is to educate home buyers, nothing more, nothing less.

Andrew

If you scroll to the bottom on the main property page, near where you see the Zestimate, you’ll see the $20,000 sold price. This is information we get from public records. You’re right it is probably some sort of arm’s lentgh transaction or trustee sale.

However, also please note the * that is by the number and the text below it that says “* Transaction not included in Zestimate.”. When we know the transaction is out of the ordinary, like this obviously was, we do not include it in the Zestimate calculations and we designate that fact on the site.

Final point, Zillow is one of the only automated valuation sites that actually publishes our accuracy numbers, down to the county level. Here are the number for CT – http://www.zillow.com/howto/DataCoverageZestimateAccuracyCT.htm .

Hope that helps!