Zillow’s Zindex does not include recent home sales, yet it professes to be a reliable indicator of home values.

From Zillow’s May 6, 2008 Press Release:

Home values in the first quarter of 2008 fell 1.6 percent from the fourth quarter and 7.7 percent from the year-ago quarter, marking the most significant year-over-year decline in the past 12 years*. (emphasis added)

From Stan Humpries post at the Zillow Blog:

Conditions continued to worsen in Q1 as U.S. home values continued their slide down with the Zindex posting a 7.7% year-over-year decline. (emphasis added)

Sounds like serious stuff, this Zindex. It’s not. It’s a statistical sleight of hand– a Zillow illusion– a Zillusion, if you will. Why? Because a Zindex is NOT based on actual home sales. That’s right.

Not a single home sale is included in the Zindex.

So what exactly is in this Zindex stew? Nothing but zestimates and boiled potatoes (those folks who proclaim the Zindex as an authoritative housing value report). For those who don’t know it, zestimates are NOT home values, despite what Mr. Humphries writes or Zillow publishes. Zestimates are Zillow estimates of home market values based on computer calculations which depend in large part on data from the local tax assessor’s office, which data may be outdated, incomplete or outright wrong (neither the computer nor the Zillow stat man visit your home). Zestimates are inherently erroneous– to what degree is unknown— the zestimate’s degree of error is not determined UNTIL a home is actually sold. This is a key point– the actual sale determines the zestimate’s worth as a home value indicator— it is the actual home sale which creates the error rate that Zillow touts as a measure of a zestimate’s accuracy and reliability.

So, if actual sales are the gold standard of value against which zestimates are measured, why are they excluded from the Zindex? The short answer is Zillow believes its zestimates are more reliable than recent actual sales to measure housing value trends. (David G of Zillow has called recent sales data a questionable “legacy approach”). This is probably based on the notion that it is better to have estimates of all homes than actual sales prices of some. While this in an attractive theory when there is a dearth of recent sales, it is nonetheless flawed when one is using zestimates of questionable worth. (It is even more unreliable when sales are robust.) Keep in mind that by Zillow’s own admission, a zestimate is only a starting point for determining a home’s value. So, start by asking yourself how a gaggle of starting points can rise to any level of authority of housing values.

Yet, the Zindex database is wholly comprised of zestimates, these starting points, of unknown error. And actual home sales, the ending points, and the zestimate’s gold standard, are left out. But the Zindex is what Zillowsticians are peddling to the real estate industry and the public as authority on the state of home values. Thanks to newspapers picking up the story (and giving the Zindex credibility), the public may be buying it. I’m not. Now, you can expect a comment from David G that because the Zindex is the median zestimate (middle value), the Zindex somehow overcomes the negative effect of having no actual home sales and an unknown error rate. Hooey with a capital H, Mr. G. Actual recent home sales are more valuable than zestimates.

Question Zillow (and David G) will not answer: Does the exclusion of recent sales data make the Zindex a more reliable report from one that does contain actual sales?

In my opinion, the exclusion of recent home sales makes the Zindex less reliable than one that includes recent home sales.

Tip to Zillow to Improve its Zindex: Since you believe all homes should be represented in your Zindex, you should include recent home sales, in lieu of zestimates, for those homes. (You can send me my fee in cash in a brown paper bag.)

*Since Zillow’s Zindex only came into existence in 2006, the Press Release reference to a 12 year low is misplaced. It’s like comparing zapples to zoranges.

[Image: Waterfall by M.C. Escher]

Related Posts:

Zillow Housing Reports: The Statistical Lie of Estimated Truth

Zillow: Truth by Association

The Power of Print: Perception as Truth (see David G’s comment that “recent sales data” is a questionable “legacy approach”. Oh yeah, well this legacy of recent sales is what tax assessor’s use and, thus, Zillow.)

Technorati Tags: zillow, zindex

To mothers everywhere, Happy Mothers’ Day!

Did you know it’s the 100th anniversary of the official celebration of Mothers’ Day?  Somebody did.

[Image: Inside album photo from The Mothers of Invention’s We’re Only in It for the Money.  (1968 Verve)  ]

Here are links to our first interviews (the women always come first):

Christine Forgione (The Blog Queen of Queens) Interview.

Mary McKnight (RE BlogGirl) Interview.

Technorati Tags: sellsius, interviews

Rudy added Alan Dalton, which was a nice touch.

Technorati Tags: selltoons, cartoons

We hit the road toward San Francisco the next morning heading north to Boston (yeah, I know it’s not west, but we had to see some blog buds in Beantown– T. Longo and the boys)

First stop: Boston

After a month on the road, 10,000 miles and 31 cities, loads of film, hundreds of photos and thousands of memories, we rolled into San Francisco on July 30, 2007. This was the post from the Haight, home of the Summer of Love 40 years ago. The Blogger Bums had arrived.

We finally made it to San Francisco. 10,000 miles and 30 cities in 31 days. Our first stop— Haight Street— where love (and hippies) reigned one summer forty years ago. We are here to spread some blog love.

If you want to share the love, call us at 646-714-2720. You can find us parked on Haight Street (at Belvedere), just across the street from a Zillow-like establishment.

We talked to Brad Inman and Jon Washburn of Active Rain, both of whom signed on as our first sponsors. We had no idea how to organize it or pay for it. All we knew is we were going to do it. Blog Tour USA was announced in this post on May 7, 2007.

2 Bloggers. 1 RV. 21 US Cities = Blog Tour USA. Coming Summer 2007

This summer, we are hitting the road to promote blogging, real estate bloggers, real estate agents, Sellsius°, the Inman Bloggers Connect and more. We will start Blog Tour USA in New York City and end in San Francisco at the Bloggers Connect July 31st, zigzagging our way to visit all our blogging brethren.

Along the way, we will rendezvous with real estate bloggers, agents, brokers and consumers to celebrate our industry and each other— heck any bloggers from any industry are welcome to party with us. We’re taking the online blogging community OFFLINE for a little fun in the summer sun. We’ll be taking photographs, video and, of course, blogging the whole way. The last stop on the tour will be in San Francisco, the evening before the Blogger Connect, at a yet to be determined venue where the “Beer with Bloggers” party will take place. It will be the largest real estate blog party ever!

We are still planning the route and will release more information in the coming days and weeks. If you want us to stop in your city or town, please leave a comment.

In order to promote the tour to the masses, we will wrap the entire bus with a “Blog Tour USA” logo and the logos of all of our sponsors. If you are interested in sponsoring our little road trip, give us a call at our Grand Central number 1-646-714-2720, leave a comment below or contact us here.

If you have any ideas, please pass them on. Roll with us this summer!

Related Posts:
Let Sellsius Take Your Face Cross Country: be a part of the tour
Looking for Good Samaritan Realtors: help others the way you choose
Blog Tour USA Route: 30 days, 21 cities (gather a group and we’ll be there)
Inman News & Active Rain to Ride with Sellsius: our corporate sponsors (so far)
Blog Tour USA Blog–official blog of the tour. Visit for updates and news.

Technorati Tags: Blog, Sellsius, Real Estate Classifieds, Blogging, Blog Tour USA, Inman News, Blogger Connect, Blog Across America

The developer received thousands of objections and pleas, worldwide, to save the Bell Labs landmark in Holmdel, NJ. At a meeting I attended in Holmdel, the developer CEO cited the post (and the reaction) as the reason for keeping the main building and creating a library to house Bell Lab artifacts. I felt a great sense of the power of blogging to effectuate change. I was hooked.

Bell Labs Holmdel facility is not extinct yet. The lab, which for 44 years was used by scientists to discover & create some of the world’s greatest technological advances, might be saved from demolision through the work of bloggers.

My sincerest thanks to Ryan Block of Engadget for taking this important story to its readers. Read his post today. Together, Sellsius° & Engadget hope to spread the word to save this technological piece of history for future generations to enjoy. With the help of our readers, the site can be preserved as a National Historic Site or even a museum.

The Holmdel Lab was the birthplace of seminal technological discoveries. We have no problem preserving the homes of famous individuals with nice plaques, why should we not preserve the home of one giants of technology, Bell Labs. See our original post “Save Bell Labs From The Wrecking Ball”.

In my research on this story I contacted the former head of all research done at the Holmdel lab told me that almost all of the optical transmission, wireless, and microwave work was done at Holmdel. He went on to say that “the first transmissions to a satellite were sent from Holmdel in a message by President Eisenhower.” Further that “radio astronomy was discovered at the Holmdel site in 1937 by Jansky.”

Let’s give it a look to see if it’s worth saving as much as a celebrity’s childhood house. We respect the new property owner’s right to use the land but perhaps a piece of it can be preserved for its historic value. A parking lot with a plaque may not be enough of a remembrance.
Email New Jersey Historic Preservation Office at : NJHPO@DEP.STATE.NJ.US

Contact National Register of Historical Places for Listing this property.

Want to know the state of the blogos in 2007? We have no idea but this is what a Times Square fortune teller told us:

1. Every website will have a blog. After hearing this, we demanded our money back. The reply came swiftly, “It’s just a starting point.”

2. Every currently active blog will have advertising of one form or another. The most popular reason will be to cover the cost of hosting. Some bloggers will only give their blessings to Amazon, until 2008, when they too will cave, upon pressure from their spouses.

3. As a result of 2 (and some meaningful dough), some blog contributors will demand compensation, which will include a cut of the ad revenue for their part in building the owner’s blog brand and traffic. At least one contributor will threaten to leave, taking all their posts with them, to which the blog owner will respond, “Sorry, all the blog content, and ad money, belong to me because it’s my blog”. Insults and blogsuits will follow. Hey, no one said the future would be a bed of roses.

4. As a result of 3, Blog Contributor contracts will be de rigueur. A percentage of ad money will become standard and the top contributors will negotiate the best rates. Blog owners will demand contributor exclusivity and not get it.

5. As a result of 4, Professional Blog Post Contributor will be a viable job description. Personal RSS feeds of their work on various blogs will be available.

6. Every blogger will join MyBlogLog, which will become the MySpace of blogging.

7. Larry Cragun’s Darling Dozen prediction will come true.

8. “Blibel” will become a meme after someone wins a libel lawsuit against a blogger.

9. There will be a reality show based on blogging.

10. When you ask the question “Do you read any blogs?”, the answer you are most likely to hear will be “I’ve heard of blogs but I’m not really sure what they do”.

Bonus Prediction: Because of pressure from poor typists, the blogosphere will become the blogos.

Hugh MacLeod of gapingvoid is a man after my own heart— bright, witty, satirical, profound with humility & humor. Plus, his drawings make me smile.
Hugh asked his readers to submit a mini-manifesto to Change the World. The only requirement, other than meeting his quality standards, was it be less than 500 words. Now I can be verbose with the best of them, and often am (I’m seeking help though), but I aspire to the sublime beauty of verbal economy, best found in Japanese poetry and haiku. So I submitted “Zen Blogger’s Manifesto”, which I share with you below. Not even close to 500 words, so don’t worry about zoning out.

But first a little background, if you will indulge me. (What choice have you got? Are you going to bail out now?) I wrote it late at night in a fit of spontaneity and emailed it to Hugh. Then I forgot about it. Today, as is my habit, I cull through the mass of junk mail my spam filter sucks up, to rescue any non-spam that has been innocently hijacked. Well, in this week’s spam morass, I found Hugh’s email, sent to me last Sunday (yikes) asking whether he could publish it. I just emailed him to apologize for my delay in responding and of course he could. A lesson: check that junk mail regularly, you may miss something.

Hugh is heading to Europe tomorrow, so he may be too busy to post it. So I share it with you here and now.

Zen Blogger’s Manifesto

Do not follow in the footsteps of others,
seek what they sought and make your own footsteps.
Write not for others, as there are too many.
Write for yourself, as there is only one.
Subtract before you add.
Listen more than you speak.
Give more than you take.
Make but do not measure.
If you want to change the world, love someone.
All manifestos are dung.