Re:Zillow just gave us a look at machine learning's future
by ethbr0 on Sunday November 07, 2021 @10:39AM
(#29140312)
The broader point is... Zillow's alpha should not be valuation, for all the reasons you listed.
It should be geospatial trends.
There's a fixed margin on any given home, caused by the inefficiency of real estate markets. But many actors (the seller, other agents) have an inkling of what that margin and the numbers on each side of the sale are.
What they do not have as good of a bead on, and Zillow is best placed to know, is high vs low neighborhood boundaries, and how they're moving, across time.
It seems like there would be more (and more reliable) margin in betting on the boundary movement, that the seller isn't aware of yet, than the absolute value of a particular home.
And yes, they are presumably capturing this in their price difference, but it seems like it should be a core foundation.
It should be geospatial trends.
There's a fixed margin on any given home, caused by the inefficiency of real estate markets. But many actors (the seller, other agents) have an inkling of what that margin and the numbers on each side of the sale are.
What they do not have as good of a bead on, and Zillow is best placed to know, is high vs low neighborhood boundaries, and how they're moving, across time.
It seems like there would be more (and more reliable) margin in betting on the boundary movement, that the seller isn't aware of yet, than the absolute value of a particular home.
And yes, they are presumably capturing this in their price difference, but it seems like it should be a core foundation.