At a party recently, I had the chance to meet Richard Barton, the founder of Zillow and he mentioned he was starting up a real estate site. He was a nice, very low key guy who happen to be one of the founders of Expedia.com, which turned the travel industry on its ear. His new site, Zillow got everyone’s attention and no one knew what it was – until yesterday. Inman spent a lot of effort peaking our curiousity and I got a lot of calls from people in the industry asking what the heck it does.
Wednesday was launch day. I read four articles this morning about the site and got excited to check it out for myself when I got into work. The NY Observer article was especially good. In fact I read it on my Treo as I commuted in to work.
As far as the media coverage goes, I find it interesting that technical tools like this are often painted as spelling the end of full service brokerage services. I find this point hard to accept. I think that tools like Zillow and others are a natural evolution of technology and special services like this offer something that full service brokers cannot provide and really aren’t in business to provide. I think its kind of like the iPod. Apple builds them but third parties build all the add-on accessories.
The result of these tools is a more efficient market because of the additional flow of information. Its also raises the bar for full service brokers to have staff that are more fully informed about the market. There is opportunity to interpret information. Over this next year or so, the number of transactions is likely to drop and many brokers who have relied on being order takers will now have to actually market. Those that always marketed in boom times, should have nothing to worry about.
Since the Zillow involves valuation, and I am an appraiser, I was especially curious because its such a daunting effort to automate valuation on such a large scale. In fact, for the most part, the lending industry has been trying to do this for the past 5 years with limited success (If you base success on accuracy rather than simply pushing paper for the files to keep the regulators happy). A few months ago, a national lender told me that out of the 10 major automated valuation services (AVM’s), 8 were totally unreliable, 1 was marginal and 1 was pretty good. This lays the groundwork for my initial skepticism about Zillow, but I am open minded. I think it will evolve and will have more strength in certain markets than others depending on the data they are fed.
Well, apparently, the public relations juggernaut the emerged over the past few weeks with the build up, overwhelmed the site early in the day and as of 11:51pm tonight they are still of the air. I found their ZillowBlog which explained the problem and put a human spin on it. They should definitely link the blog to their home page to keep a dialog of their technical progress.
For those who were lucky enough to get access, the reviews were pretty good but basically mixed (after all this is a beta and there is a lot more data for them to tap into.) Of course the “red light theory” seems to apply here. Users will likely only remember the valuations that were not accurate and not those that were.
I anxiously await my turn. I am sure this is going to be fun. More to come.
_As seen from their web site_
Tags: Zillow, New York Observer, Zestimate