Zillow and the housing market

Until 2021, I didn’t pay much attention to the housing market. At that point, we’d lived in the same house for 34 years. There was no Zillow when we bought that house, and we bought directly from the owner, without an agent.

We ended up using an agent to buy our house in Rhode Island. The house had not gone on the market when we bought it, so we didn’t have to compete with other buyers, and from what we’d already seen, the price was fair and the neighborhood was what we wanted. We didn’t use Zillow to shop.

I have to admit that since we bought this house in 2022, I’ve been tracking the Zillow price on a weekly. That price has been seasonal, going way up in Spring and Summer and down in Fall and Winter. The net is an increase year-over-year, but the weekly fluctuations have sometimes been on the order of thousands of dollars. So I wasn’t entirely surprised to read this:

“Buying a home looks very different than it did 20 years ago. Instead of calling up a local real estate agent, typically everyone’s first step is to log onto Zillow to peruse real estate and check the “Zestimate” to see how much a dream property is worth.

 

“Zillow’s estimates, and similar ones generated by Redfin and other platforms, have a major impact on housing prices. Yet we don’t know nearly enough about how these companies estimate home prices — in fact, sometimes they are far off the mark. In some cases, short-term fluctuations in these home value estimates have led to listing prices jumping by up to 20 percent. That’s not necessarily good for sellers, if it leads their homes to sit on the market because they are overpriced, and it’s definitely not good for buyers, who might overpay.”

We had an agent we trusted. We made offers on three houses and were out-bid before we were offered the one we bought. In each of those three cases, the agent told us what she thought the house was worth and when the bids went over that, she told us to stop. Will AI take the place of agents in the future? I don’t know and I hope I don’t have to find out. I don’t want to move again.

 

https://www.bostonglobe.com/2025/02/04/opinion/zillow-redfin-estimates-distort-housing-market/