Earlier this week, Zillow introduced a new-and-improved Zestimate algorithm which was supposed to assign more accurate values to homes across the country. But don’t tell that to residents of Kenmore, a suburb just north of Seattle.
Many of the Zestimates for homes in the city have seen astronomical increases in recent days. For example, an 1,800 square foot, two bedrooom town home near the Inglewood Country Club — valued at about $360,000 just a few days ago on Zillow — now shows a Zestimate of $10 million. Most of the surrounding town homes show similar Zestimate increases.
A nearby 2-bedroom condo — listed for sale for $395,000 –shows a Zestimate of $10,692,500.
Zillow spokesowoman Amy Bohutinsky said they are aware of the problem, and it should be fixed later today. Just one zip code is impacted by the glitch, she said.
Since its launch more than five years ago, Zillow has taken heat over its Zestimates. Many home owners have complained that the automated home valuations don’t accurately reflect the true value.
Zillow has always claimed that Zestimates are a starting point in the home shopping process.
The company has continuously improved the Zestimate algorithm over the years, publishing the margin of error for major cities and disclosing details on how the valuation is created.
In fact, the latest upgrade made Zestimates 33 percent more accurate, according to the company.
That hardly appears to be the case in Kenmore. But I am sure there are some residents of that city, which borders the north end of Lake Washington, wishing they could sell today at the values listed on Zillow.
One GeekWire reader suggested that Zillow implement a “sanity check” to set off an alert if homes exceed a certain valuation increase in a set period of time.
Asked about that possibility, Zillow’s Bohutinsky said that the company does have “a very sophisticated system of testing.”
“As you can imagine, running data on approximately 100 million homes in tens of thousands of ZIP codes is very complex,” she said. “We made significant improvements to accuracy with our changes this week.”
The improvements in the Zestimate — excluding the Kenmore areas — come at a critical time for Zillow as the Seattle company positions to go public.
