Zillow.com, the Web site that provides free home valuations, has been accused by a coalition of community activist groups of undervaluing the homes in black and Latino neighborhoods.
Zillow said the charges were groundless. Zillow collects data from public sources on a home’s characteristics, tax assessments and recent sales and uses computers to make its estimate. It has not disclosed the algorithm that it uses, but the company, which is based in Seattle, said it did not use demographic data in the calculations. On its site, it notes that the estimate is not an appraisal, but a free research tool.
A Zillow spokeswoman, Amy Bohutinsky, said the site’s valuations, which it calls Zestimates, were intended for consumers and had never been marketed to real estate professionals. The company sees the tool as a way to empower consumers who in the past would have to rely on a real estate agent to make an estimate based on the sales of comparable homes in a neighborhood.
The company has said that estimates of homes at the high end and low end of the market tend to be less accurate because there are fewer sales to use as comparisons.
New York Times - full story
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