The new axiom that can be reasonably applied to the virtual reality construct of the brave new world is “Don’t put all your algorithms in one basket.”
The real estate industry and especially buyers, sellers and homeowners are finding out the hard way, like a conservative christian professional white male, who unfortunately makes a wrong turn in Hollywood and ends up on the set of The View and suffocating under Joy Behar’s flailing arm fat, that humans still hold the title as the most proficient resource in determining the value of a property and are light years ahead of the future AI overlords in charm and wit. No offense to pidgin broken English laden with profanities and DACA Alexa and Siri.
The Seattle Times reports that a rogue algorithm on Zillow.com, indicated that a home in Belfair, Washington was listed on the automated real estate website as worth $1.8 million, or a slight error of over $1.3 million more than the assessed value. The couple who purchased the property, are in stunned disbelief with margin of error at nearly 700%, and the possible ramifications the blunder may have in causing potential headaches when they decide to put the property on the market.
The egregious inaccuracy in the Zillow formula is nothing new for the Seattle based company, as the software engine for the “Zestimates” ironically missed the mark by a wide margin in estimating the selling price of CEO Spencer Rascoff’s home by 40%. Adding insult to injury in a dandy divine comedy of hilarity, the algorithm whiffed at the next home he purchased by only $1 million. Hmm- does anyone see an alarming trend developing here?
While Zillow and competitor Redfin merely provide estimates as a search tool for buyers and sellers, and official property appraisals are done in person, the issue with the erroneous data, is that the younger generations perceive the prices on the sites as official listings, which can cause a plethora of confusion and internecine when an offer is officially made. In order to improve the accuracy of the estimated valuations, Zillow has reached out to the software development world and offered a $1 million to the individual or the team, who can collectively save the company’s bacon, with a system that even remotely accurately models the real world. With a business model based on selling onsite advertisements to real estate agents (there were allegations that at one point the company was employing shady sales tactics) and armed with an enormous cold calling center, buyers and sellers should interpret the company’s data with a discerning grain of salt, or their rustic cabin in the woods could be valued at $3 million.
Read the Seattle Times story here.