Zillow algorithm overestimates Seattle home’s value by 700 percent

Zillow may just be a seller’s best friend (but certainly not a buyer’s). According to a recent report from the Seattle Times, the popular online real estate database somehow managed to overvalue a Seattle home by a whopping 700 percent.

The home, which owners Sue and Roy Carlson purchased in June 2017, cost the couple just $225,000 (a particularly good deal because the property was initially slated for foreclosure). Other real estate companies (think Redfin and Realtor.com), now show the value of the home as somewhere between $268,000 and $318,000. Zillow, on the other hand, says that the property is worth $1.8 million.

Thanks to some serious SEO magic on Zillow’s side, when you Google this home’s address (like most home addresses), it’s the Zillow result (or Zestimate) that returns first. And that means that the first thing that most folks are seeing when they look into the Carlson’s home is a valuation that is seven times what just about everyone else on the market thinks it ought to be.

“I don’t have a clue where they came up with this number,” Sue Carlson told the Seattle Times. “It’s not worth anywhere near $1 million. They’re nuts.” She added, “If anybody wanted to buy the house (and saw the $1.8 million Zestimate), they would just go, ‘Well, that’s ridiculous.’”

Carlson then took a deep dive to determine exactly how Zillow might’ve arrived at its hugely inflated figure, and as the Times notes, “Her story offers a peek into how algorithms can go wrong, and highlights an ongoing issue with one of Seattle-based Zillow’s most popular features.”

As it turns out, Zillow admitted in 2017 that its Zestimates are generally off by around $40,000 when considering the “typical single-family home sold in Seattle.” In fact, when the company’s own CEO Spencer Rascoff sold his own house in 2016, the Zestimate was too high by a factor of 40 percent. Moreover, the house he ultimately purchased was misestimated by more than $1 million.

 These issues have led to some lawsuits, as well as a number of attempts by Zillow to improve its estimation process. In fact, the company last year launched a competition with $1 million prize in prize money to better the Zestimate algorithm (the company recently announced 100 semifinalists who have already made some small improvements to the platform).

The case of the Carlson’s home, however, is particularly outlandish. The problem was that Zillow somehow recorded the actual sale price of the home when the Carlsons bought it as $1.77 million. This, a spokesperson said, was not a fault of Zillow’s, but rather of a third-party vendor who incorrectly supplied sales data. Zillow has since fixed the actual sale price, and the Zestimate should soon be corrected as well.

“Overall, the Zestimate is incredibly accurate — with a median error rate of 4.5 percent — but occasionally human error does occur,” Zillow spokesman Viet Shelton said in a statement. “Since the Zestimate is calculated using thousands of data points, it’s only as good as the data provided.”

Smart Home

Whatever happened to those dumb smart products we wrote about in 2017?

A smart salt dispenser? As manufacturers rush to get the next new smart item out there, we wonder if all these new inventions are really necessary. Here’s a list of 10 of the quirkiest home smart gadgets available, and where they are now.
Movies & TV

Disney completes its $71.3 billion purchase of 21st Century Fox

Now that Walt Disney Company has closed its $71.3 billion purchase of 21st Century Fox's movie and television assets, what does this future hold for franchises like X-Men, the Fantastic Four, The Simpsons, and the rest?
Computing

After fourth attack, hacker puts personal records of 26M people up for sale

A serial hacker going by the name of Gnosticplayers is selling the personal data of 26 million people who have been using the services of six different companies from across the world.
Movies & TV

The best shows on Netflix right now (March 2019)

Looking for a new show to binge? Lucky for you, we've curated a list of the best shows on Netflix, whether you're a fan of outlandish anime, dramatic period pieces, or shows that leave you questioning what lies beyond.
Movies & TV

The best movies on Netflix in March, from Buster Scruggs to Roma

Save yourself from hours wasted scrolling through Netflix's massive library by checking out our picks for the streamer's best movies available right now, whether you're into explosive action, witty humor, or anything else.
Smart Home

Ikea isn’t throwing shade with the delayed release of its smart blinds

Ikea planned to release is Tradfri-compatible smart blinds in April 2019, but the products have been delayed until later in the year for a firmware update that promises better functionality.
Emerging Tech

Awesome Tech You Can’t Buy Yet: Write music with your voice, make homemade cheese

Check out our roundup of the best new crowdfunding projects and product announcements that hit the web this week. You may not be able to buy this stuff yet, but it sure is fun to gawk!
Smart Home

Lutron’s Fan Control makes ceiling fans smart, but has some turnoffs

Lutron recently came out with a smart switch that controls ceiling fans, the Lutron Caseta Fan Speed Control Switch. How does it stack up? Here's a first-hand review of the Lutron Fan Control switch.
Cars

Amazon and Kia team up to simplify EV home-charging station installs

Kia Motors announced a new program with Amazon for electric vehicles. Customers planning to purchase a new Kia EV or PHEV can check out recommended Level 2 240-volt home charging stations and arrange installation in their homes.
Smart Home

Traeger’s latest wood-pellet grills are smoky, smart, and spacious

Traeger is famous in the world of barbecue and heavy-duty grills for its signature pellet grills and now the company is expanding this year by adding three new brands of redesigned
Smart Home

The five best teeth-whitening kits you can buy on Amazon

Teeth whitening can have a major impact on a person’s smile and overall appearance. You don't necessarily have to go to the dentist to get your teeth whitened though. Here are the best teeth-whitening kits you can buy.
Smart Home

Is your Keurig making gross coffee? Might be time for a cleaning

No one likes a dirty, scaled, or smelly Keurig, but how are you supposed to clean them? Before you throw yours out the window, here is a quick guide on cleaning your machine out thoroughly.
Smart Home

Which is better, the original Echo or the Echo Dot? We compare them

Amazon Echo vs. Dot: Having Alexa answer your questions is nothing short of futuristic, but which device should you get? There are some big differences between the two, especially in size, sound, and cost.
Product Review

Gate’s Smart Lock is locked and loaded but ultimately lacks important basics

In a world of video cameras and doorbells comes the Gate Smart Lock, a lock with a video camera embedded. It’s a great idea, but lacks some crucial functionality to make it a top-notch product.