Does anyone have a source of data for the variance of the home prices in the U.S.? Getting within 10% sounds spectacular, considering that I think you could get close to 10% price differences between different combinations of buyers and sellers on the exact same property. If someone were to come up with an algorithm for predicting the price of a steak dinner at a restaurant, using spotty 5 year old data, I think everyone would be impressed at getting it correct within $3 of $30.
>If someone were to come up with an algorithm for predicting the price of a steak dinner at a restaurant, using spotty 5 year old data, I think everyone would be impressed at getting it correct within $3 of $30.
As I said, as an academic exercise it's great. But we're not discussing whether Zillow deserves goodie points. The question is: Is this Zestimate useful for anyone?
From a buyer's or seller's POV, 10% is too high an error. Sure, if your house is only $100K, $10K off is not much. If your house is $300K, you're not likely going to get far by underbidding with $270K, and the seller will be deemed too optimistic for asking $330K (although with bidding wars, it occasionally does happen).
For either the buyer or the seller, being told the price could be between $270-330K is virtually useless in deciding what to buy/sell for. It's just too much variance.
With high numbers, absolute amounts matter more than relative percentage.
