Re:Zillow lost money because they weren't willing to lose money
by winternett on Saturday November 27, 2021 @01:34PM
(#29362273)
When you reduce price on a house listed on Zillow and Redfin right now, it bumps it to the top of taxonomy-based cues on those sites because of the information update, which increases overall recommendations/listing promotion to potential buyers. It's a new step in getting a property sold introduced by technology dynamics. Price reductions in traditional real estate listings worked differently (You were not refreshed on MRIS). with everyone performing price reductions though, that can have mis-leading effect on economic indicators, and it can also create harmful price reduction "panic" in certain markets though, so this is going to be a burgeoning issue moving forward.
I am luckily both a web developer and knowledgeable about real estate, most people don't properly understand the dynamics that are impacted/introduced into the market by technology and algorithms... People assume the traditional real estate market rules are still in play primarily still, but technology has complicated everything... That's also why Zillow overbought homes, because people making critical decisions too often put "traditional pre-tech" real estate market concerns over considering modern impacts of IT to their decisions.
My house sold within 2.5 months overall, it was not on the market for a long time.
The fact that a house is for sale at a given price, but has not sold after some time, is a strong signal that it's overpriced. The longer it's been sitting, the stronger that signal is. They'd be crazy not to include that data in the Zestimate.
Now, if it's extremely fast, eg they adjust the price down within a day or so, then it seems a little ridiculous. OTOH the Zestimate has always been a rough indicator at best.