Zillow Comes Out Of Beta, Improves Zestimates
Real estate may be slumping in the real world, but online the opposite is true. Zillow and Trulia in particular have been driving lots of change and innovation in the online real estate segment. Yesterday Trulia released a free publisher platform. And last night Zillow made several announcements. Among them, the Seattle-based site is formally coming out of beta and, together with several competitors (Yahoo Real Estate, Oodle, Trulia, among others), is supporting a common data format that will standardize feeds from brokers and multiple listings services (MLS). This should accelerate the transition and delivery of more listings online.
Zillow also said that it has greatly expanded its database of homes for which it offers its “Zestimates.” Spencer Rascoff, Zillow CFO & VP of Marketing, told me that Zillow will now have home valuation estimates for almost 90 percent of all homes in the United States. Rascoff also said the site continues to add for sale listings from brokerage partners at an increasing pace. (Zillow also has a far-reaching deal with a consortium of US newspapers.)
Zillow’s Zestimate algorithm has also been improved to make it more accurate according to Rascoff. There are more data points, and the factors being weighted are more nuanced and more locally sensitive than in the past. He added that accuracy improvements approach 30 percent in some cases.
The home valuation Zestimates are what initially captured users’ imaginations when the site launched in early 2006, driving tremendous word of mouth and growth. But they have also been controversial and heavily criticized as inaccurate. (At one point they were the subject of litigation.) Rascoff told me that in addition to improved algorithms, roughly a million homeowners have “claimed their homes” and modified the information available on the site, which has also contributed to improving the accuracy of Zestimates.
Beyond Zestimates, Zillow has added innovative community features and advertising programs that provide super-local targeting (down to the house level). The company was started by the team behind travel site Expedia and has raised a gargantuan $87 million in VC funds to date.
Borrell Associates estimates that online real estate-related advertising is worth $2.9 billion today. Traditional US real estate classified advertising was worth just over $5 billion in 2006 according to the Newspaper Association of America, while the National Association of Realtors estimates that total real estate ad spending in the US is roughly $12 billion annually.
Here’s a slightly more critical view of Zillow from TechCrunch.
Separately Yahoo, which claims to be the number one online real estate site, introduced a new program that enables real estate franchises and brokers to post all their listings online for free.