Property Grunt

Sunday, February 11, 2007

The Wild West

Today the NYT did an article on on how consumers now want hard data on real estate listings ranging from valuation and market conditions. It is pretty much stuff that all of us bloggers have been covering for quite awhile, however there were two things that caught my attention.

The first was this Zillow complaint.

Within a few months of its opening, however, Zillow attracted some unwelcome attention. In October, the National Community Reinvestment Coalition, a nonprofit consumer group in Washington, filed a complaint with the Federal Trade Commission that contended that inaccurate valuations on the site, both high and low, were damaging the interests of all consumers and particularly the interests of working families.
The complaint has yet to be resolved, but a spokeswoman for Zillow was careful to point out the site’s disclaimers.
“We’re a starting point,” said the spokeswoman, Amanda Hoffman. “We’re not a

crystal ball. It’s the Internet. You sort of have to take everything you read on the Internet with a grain of salt.”

I am not sure if this complaint is meritorius in anyway. It seems to me that that "Coalition" doesn't want this type of information so readily available to the public because it allows people to figure what areas are higher and lower in value. If you live in a town that has low values, people are going to wonder why and if they ask the right questions they will be able to figure it out. The result is they may not move there.

I feel this complaint has no merit for a variety of reasons. The main reason all real estate is not an exact science. Everything is determined by the market and how the market reacts changes on a day to day basis. Besides, even before Zillow and the internet, a person could always figure out why an area had such low home values by simply walking around the neighborhood and talking to people.

I plan on looking into this further because there is something about this complaint that bothers me.

Another quote that I thought was quite hilarious was from Mr. Dalton.

As an extension of pure data about communities, is planning to add some consumer opinion, a feature that follows somewhat in the style of online retailers like
Mr. Dalton said the company was developing a feature that would allow people who live in a community to comment on the site about schools, restaurants and other amenities.
He conceded, of course, that public opinion could be tricky to manage in a high-stakes sales environment. He said that site administrators planned to allow residents to make recommendations — but that the site would employ editors to keep watch.
“It won’t be the wild, wild West,” he said

You have to be kidding me. It already is the wild west out there. Curbed and Inman news can't be stopped. The real estate online presence is like Hulkamania. It's running wild. Even if they do employ "editors", they are going to be in for quite a ride.

These people are playing catchup. What they should be doing is figuring out a way to adapt to being outsourced.