Redfin just launched a pricing algorithm to compete with industry leader Zillow. Glenn Kelman, head of Seattle-based Redfin, said the broker’s newly unveiled software spits out values that are more accurate than Zillow’s love-em-or-hate-em Zestimates.
At first glance, I like Redfin’s values, if only for selfish reasons. Redfin says my house in Lake Worth is worth $393,485. Zillow rates it at a puny $331,867.
The trend is the reverse for the home of Florida Realtors President Andrew Barbar. Redfin pegs the value of his Boca Raton crib at $415,639; Zillow says it’s worth a loftier $494,065.
At second glance, Redfin’s tool might not be ready for prime time. The site offers no estimate for the mansion on Versailles Boulevard in Wellington owned by Redfin agent Delray Valle. Zillow says it’s worth $1.23 million.
The same goes for West Palm Beach Mayor Jeri Muoio’s house. Redfin doesn’t have an estimate; Zillow says it’s worth $1.76 million. Michael Jordan’s manse in Jupiter? Redfin gives no estimate; Zillow pegs it at $22.3 million.
Redfin says it has cataloged only 2 million homes in Florida.
Intriguingly, Redfin hazards a guess at the value of Palm Beach County’s priciest mansion: It says the oceanfront spread at 515 N. County Road in Palm Beach is worth $181 million. Zillow takes a pass on that property.
Kelman announced his new valuation tool late Wednesday; he said Redfin’s access to multiple listing service data lets it create more accurate estimates.
Redfin promises a “median error rate” of 1.96 percent for homes on the market and 6.23 percent for off-market properties; Zillow cops to an error rate of 7.9 percent. In a news conference late Wednesday, Kelman couldn’t resist a dig at his rival; Kelman said Redfin’s estimates are more “transparent.”
“We’re in the business of selling houses,” Kelman said. “We have to stand behind those estimates.”
However, Zillow says its larger database makes accuracy more difficult.
“It’s important to note that the two cannot be compared on a apples-to-apples basis because the Zestimate is computed on a much larger footprint,” says Zillow spokeswoman Camille Salama. “There are Zestimates on more than 100 million homes across the entire country whereas Redfin Estimates cover 40 million homes in 35 major metros.
Redfin acknowledges that its Florida estimates aren’t perfect. Values on 90.7 percent of them are within 10 percent of the true value; the other 9.3 percent are off by more than that.