Comments on: A Response From Zillow http://www.charlottecommunitiesonline.com/2007/08/15/a-response-from-zillow/ An insiders look at Charlotte Communities, Charlotte Relocation, Charlotte Homes for Sale, Charlotte NC Real Estate and all things Charlotte Tue, 6 Jan 2009 15:43:47 +0000 http://wordpress.org/?v=2.3 By: David G from Zillow.com http://www.charlottecommunitiesonline.com/2007/08/15/a-response-from-zillow/#comment-15 David G from Zillow.com Thu, 16 Aug 2007 22:47:00 +0000 http://www.charlottecommunitiesonline.com/2007/08/15/a-response-from-zillow/#comment-15 Thanks Terry - if you remember, please ping me when you post your Q2 YoY data [davidg at zillow] Thanks Terry - if you remember, please ping me when you post your Q2 YoY data [davidg at zillow]

]]> By: Terry McDonald http://www.charlottecommunitiesonline.com/2007/08/15/a-response-from-zillow/#comment-14 Terry McDonald Thu, 16 Aug 2007 21:58:00 +0000 http://www.charlottecommunitiesonline.com/2007/08/15/a-response-from-zillow/#comment-14 Well good... I didn't think I had your National numbers right-- it did appear meaningless to me as well, but not being a statistician, I wasn't quite prepared to say that. <br/>I have read elsewhere that your error margin is off half up and half down, so the median should remove that error.<br/><br/>The 2nd part of your explanation doesn't quite work, because I did use 3 months of 2007 versus the same 3 month period in 2006, albeit not the 2nd quarter, just one month removed though... and we are still far apart.<br/><br/>I have the numbers for our 2nd quarter in a spread sheet, I'll just have to post and comment on them, then we'll know the answer better.<br/>Comment moderation is off. Well good… I didn’t think I had your National numbers right– it did appear meaningless to me as well, but not being a statistician, I wasn’t quite prepared to say that.
I have read elsewhere that your error margin is off half up and half down, so the median should remove that error.

The 2nd part of your explanation doesn’t quite work, because I did use 3 months of 2007 versus the same 3 month period in 2006, albeit not the 2nd quarter, just one month removed though… and we are still far apart.

I have the numbers for our 2nd quarter in a spread sheet, I’ll just have to post and comment on them, then we’ll know the answer better.
Comment moderation is off.

]]> By: David G http://www.charlottecommunitiesonline.com/2007/08/15/a-response-from-zillow/#comment-13 David G Thu, 16 Aug 2007 15:25:00 +0000 http://www.charlottecommunitiesonline.com/2007/08/15/a-response-from-zillow/#comment-13 Hi Terry, it's David again;<br/><br/>Your math is incorrect - we don't add up or average the Zestimates to arrive at the Zindex. That would yield useless information. <br/><br/>This is a common misunderstanding - the important point is that the Zindex is the *median* Zestimate. What that means is if you lined all homes up from highest to lowest Zestimate, the value of the home in the middle of the line is the median - the Zindex - and that's the number we use to report trends. We have seen that Zestimate accuracy has no bias - i.e. when we're wrong, we have an equal chance of being high as we do of being low. That implies that inaccurate Zestimates fall evenly on either side of the Zindex - so, when we report the median we are effectively excluding inaccurate Zestimates.<br/><br/>Note that Zillow's quarterly reports measure annual appreciation - i.e. Q2 2007 values are compared against house values at the end of Q2 2006, not 3 month appreciation as per the MLS analysis you did. Your comparison was not apples to apples.<br/><br/>So, the Zindex is actually a rather robust metric for house value trends. It is not subject to the inaccuracy in individual homes' Zestimates and it is not skewed by a change in the market or the mix of housing inventory like an analysis of recent MLS sales can be. <br/><br/>I hope that helps. Hi Terry, it’s David again;

Your math is incorrect - we don’t add up or average the Zestimates to arrive at the Zindex. That would yield useless information.

This is a common misunderstanding - the important point is that the Zindex is the *median* Zestimate. What that means is if you lined all homes up from highest to lowest Zestimate, the value of the home in the middle of the line is the median - the Zindex - and that’s the number we use to report trends. We have seen that Zestimate accuracy has no bias - i.e. when we’re wrong, we have an equal chance of being high as we do of being low. That implies that inaccurate Zestimates fall evenly on either side of the Zindex - so, when we report the median we are effectively excluding inaccurate Zestimates.

Note that Zillow’s quarterly reports measure annual appreciation - i.e. Q2 2007 values are compared against house values at the end of Q2 2006, not 3 month appreciation as per the MLS analysis you did. Your comparison was not apples to apples.

So, the Zindex is actually a rather robust metric for house value trends. It is not subject to the inaccuracy in individual homes’ Zestimates and it is not skewed by a change in the market or the mix of housing inventory like an analysis of recent MLS sales can be.

I hope that helps.

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