Real-estate brokerage Redfin has rolled out its own estimate of home values, covering 40 million homes in 35 major U.S. metro areas.
Residential brokerage Redfin is releasing Thursday an improved home-value estimate tool on its website, with a challenge to the accuracy of cross-town real-estate website Zillow and its “Zestimate.”
The Seattle-based brokerage says its Redfin Estimate can achieve a more accurate estimate than non-brokerage websites because it taps directly into a rich trove of data from multiple listing services (MLS) that have the most current facts on homes for sale.
“I think the Zestimate and Redfin Estimate have the same goal, which is to give people an accurate view of what their home might be worth,” Redfin CEO Glenn Kelman said in an interview. “We have better data on the homes for sale … Having access to that amount of data is something we thought would help us build a better estimate.”
Redfin is publishing estimates on more than 40 million homes in 35 major U.S. metros. Kelman said those estimates are informed partly by details that aren’t in public records, such as the views from a home or how many cars the garage can hold.
Most Read Business Stories
- Boeing chief engineer at center of 737 MAX crisis retires
- Flight operations chief at Horizon Air raises alarm over pilots' safety culture
- It’s a home seller’s market as King County sees ‘November surprise’; check out what's happening in your area
- Expedia's two top execs pushed out as chairman Barry Diller asserts control
- Boeing 777X's fuselage split dramatically during September stress test
While Redfin touts a lower error rate, it also covers less territory than Zillow, which tracks about 115 million homes in some 400 metros.
“The broader your geographic coverage, the less accurate you can be,” said Stan Humphries, chief analytics officer at Zillow Group. “It’s easiest to predict values in major metro areas that have lots of transactions and where transactions occur frequently.”
And while Redfin may tout its access to MLS data, Zillow’s estimates also rely partly on MLS and broker-provided data, Humphries said. And 60 million homeowners have added facts about their properties to Zillow’s database, he said.
Experts say consumers should look at any home-value estimate generated by an algorithm with healthy skepticism, especially if a given home is in an area with few recent sales or has characteristics, like a remodeled basement or patio, that might not be accounted for in the statistical model.
“There’s no substitute for humans who come and look at your property and understand what the features are about your property that are going to create or take away from value,” said Lance Coyle, president of the Chicago-based Appraisal Institute, the leading professional society for real-estate appraisers.