I rushed right over to the new widely hyped beta version of Zillow.com today to see how much my house and all my neighbors' are worth. I typed in my address. Onscreen appeared an image more compelling than anything I've ever seen on my computer -- an aerial view map of my street with price tags superimposed on the roofs of the houses. Be still my heart. Unfortunately, things went downhill from there. The site miscalculated relative values for the houses on my street, presumably because incomplete data -- recent sales prices and outdated information about the number of bathrooms and bedrooms in each house -- presented a distorted view of reality. The site invited me to "update" the data for individual addresses, but after I informed Zillow of recent renovation and improvement projects, the site inexplicably decreased the values of the properties in question. Zillow suffers from the same problem that has plagued all the other real estate sites online for years: over-generalizations and incomplete data. Looks cool. Wish it worked
UPDATE: Nicholas Carr, former executive editor of the Harvard Business Review, had a similar experience and explains why Zillow.com's results are so poor.