Zillow raised another $25mm … is this a sign?

by Brian Magierski on July 25, 2006

I just do not get this one. $57mm in funding to-date, 126 employees. I know real estate is a huge market, but these guys really have not solved anything. Their valuation data is wildly inaccurate … you can do just as good with tax appraisal records and some local market knowledge. Have not seen stuff like this since the late nineties (i.e. over-funded land grabs).

I’m looking at homes out of state now and am selling mine. I’ve seen zero use for Zillow in the process.

Someone in this space may justify $57mm or more in funding, but I just do not see it here yet.

– brian

  • http://www.zillowblog.com David G from Zillow.com

    Zillow users who are in your situation (i.e. buying & selling) often use the site as a starting point to gain the local market knowledge you mention (particularly regarding recent sales information).

    What sources did you use to develop local market knowledge (esp. out of state) and what features could we add to Zillow that you would find useful?

  • http://www.bloodhoundrealty.com/BloodhoundBlog/?p=134 BloodhoundBlog

    Debunking Zillow.com . . .

    Zillow.com got itself a ton of new venture capital yesterday, so today seems like a fine time to deconstruct its praxis.
    When Zillow was brand new, Catherine Reagor, the dippy local real estate reporter for the Arizona Republic wrote:
    Want a reality ch…

  • http://profile.typekey.com/bmagierski/ Brian Magierski

    David,
    Thanks for your comment. It’s really not a matter of features for me. It’s more about accuracy in the data. The problem I have is that getting accurate valuation data for real estate does not lend itself to an automated process well. I applaud your efforts to do so, but think you may experience a tremendous up hill battle …. maybe insurmountable even with unlimited resouces.

    For example, a search through my neighborhood with Zillow shows that your valuations are about 30% to 50% or more below fair market. I say this, becuase I know what several homes in the neighborhood sold for in the last couple of years, and your current valuations are about 30% to 50% below the sale prices (even from 2 years ago – Central Austin has been going up about 8% to 10% per year for the past 2 yrs). The same can be said for current real estate listing asking prices vs. the Zillow data.

    The tools I use are several. I use Google Maps to view the surroundings and traffic patterns in the neighborhoods in Boston at which I am looking. I have a realtor sending listings via email to me daily. I view listings in and around the boston area for pricing info and speak with my friends who own homes there. BTW – prices in Boston are dropping – lots of listings seeing one or many price reductions.

    On the sell side, there is appraisal information available over the Internet from the City of Austin (http://www.traviscad.org/search.htm). You can see appraisals by name, address, etc. I also talk with neighbors about homes that recently sold to find comparables.

    Appraisal records are a problem. The cities themselves can never keep up with price changes.

    It’s not that hard to get a beat on market prices for real estate from my perspective, but it requires local information and knowledge. Somehow incorporating that into your service – the current listings would be a big help. I’m afraid until home sale prices become public information, this problem will persist.

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