Archive for the ‘RealEstate’ Category

My-Currency – Prediction markets for verticals

February 2, 2007

My-Currency is another jab at bringing the agent controlled real-estate world into the social domain. Unlike the algorithmic approach of Zillow, users in control at My-Currency and are open have their say in the price of an open property with their predicted value. My-Currency wants the service to be much more than just a guessing and estimation platform. What they really want to provide for is – People establishing their online reputation through contributions to the community, by sharing their expertise, and building a social network. Answers, Wikis, blogs are just few of the tools built into the site to enable such collaboration and information sharing. Taken at a community level, as a user, you can easily tell whose judgment you can trust.

Right now My-Currency has 2 sides to it. People can search by housing or by indexes. Search by housing is typical – Zip, Price, Beds, Bath…..Different part is, for each house you get know to know what value people are associating with it, get a pricing trend, and research around it on wikis and blogs. If you want to operate on a broader scale, by choosing indexes in the search, you can get results for median square foot values for any particular zip code. Again you have access to the same set of tools to collaborate and discuss with the community members. As for the data, people bring in the leads for new properties which are up for sale in the market. Idea is better compared to MLS listings ’cause people or agents can add and update the status faster since they have the first hand information.

As I discussed with Karim Tahawi, co-founder of My-Currency, discussions around housing as compared to indexes will get too micro-focused. I guess, even by conservative estimates any house which is in the market up for sale today might not be back for sale before another 4-5 years. This means any discussions around a particular house would not be relevant for a longer term of time and might be used more from a historical analysis perspective. Also selling/buying an house is one of the biggest transaction most of us will ever do. So, most of the My-Currency traffic might be from one-time users some of whom might never really return after they buy their house. Take the case of Edmunds Car Forums, which I had discussed before. Only time people log back into Edmunds Forum is when they are looking for a new car, which happens maybe every 2-3 years for a larger percentage of people. Community is pretty responsive, and you have some great information flowing through all the time, which keep the forums very effective to use.

Having said that, My-Currency will soon be introducing similar platforms for money management, politics…..– Most of the verticals which have failed get the community effect rolling and need effective spread of valuable information and insights faster. In some respect, My-Currency wants to be a Wikipedia for many verticals, with the big difference of being able to tell the power users who drive in useful information. Still, building the 2 way street, where a user gives up valuable information in return for the same, is always difficult. Would be interesting to see how My-Currency goes about doing that.

Links:
My-Currency

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Zillow in trouble after API launch

October 27, 2006

Yesterday’s opening up of it’s API by Seattle-based Zillow did not go down well with the National Community Reinvestment Coalition(NCRC). NCRC has filed a complaint with Federal Trade Commission(FTC) claiming that the site’s home valuations are misleading consumers, real estate professionals and lenders.

NCRC is an alliance of more than 600 community-based groups working to ensure equal access to credit services for underserved communities.  Zillow is a well funded startup which till date has raised $57 million in funding. Zillow received $32 million in Series A funding in 2005 from Benchmark Capital and Technology Crossover Ventures, $25 million in Series B round of funding from Par Capital Management.

In its complaint NCRC alleged-

“Internet financial services and real estate provider Zillow.com is misleading consumers, real estate professionals and financial service providers in on-line home valuations.”

John Taylor, NCRC president and CEO claims that –

“Consumers are already at risk of being over extended due to the increased access to non-traditional loans, Zillow’s misinformation exacerbates the situation. Practices like theirs undermines the critical importance of valuation protections that benefit consumers and lenders alike, and guide the actions of all valuation professionals.”

NCRC is claiming that out of the 68 million listings on the site, Zillow has less than a 30 percent accuracy rate when offering the valuations for public consumption. In February, 2006 BusinessWeek had quoted Zillow management – “estimates are typically on target, falling within 10 percent of the actual home-sale prices 62 percent of the time”.

NCRC claims that valuations provided by Zillow are worthless and wants FTC to act in public interest and permanently “enjoin and restrain Zillow.com from violating the FTC Act”. NCRC also wants Zillow held “severally liable for redress to all borrowers who were injured as a result of the company’s violations of the FTC Act”. NCRC also alleges that over-valuations by are prevalent in predominantly white communities, while under-valuations were more frequent in predominantly African-American or Latino communities.

Zillow’s Response

“We believe these allegations are groundless. As we say consistently and prominently on our Web site, Zillow is a free research tool for consumers, and Zestimates are designed to be a starting point for consumers who want to learn about the value of homes. We make every effort to explain on our site the role of Zestimates as a research tool, as well as to clearly display our rates of accuracy for every area we cover.”

 

I don’t know if any other independent party has done evaluation of Zillow’s home valuation data, or how accurate is the analysis done by NCRC. I think this complaint will force Zillow into evaluating its Automated Valuation Model(AVM) which has been criticized before in the blogosphere. It will be interesting to watch how Zillow tackles with this situation.

Links:
NCRC Press Release
NCRC
Zillow

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