Data Into Dollars: Zillow Open Data for Your Open House
When the FOR SALE sign went up on my neighbor’s lawn two weeks ago, the first thing I did was pull out my phone and look up the list price on Zillow. Wow! They are asking like 25 percent more than Zillow estimates for my place. Oh, man. I hope they get it. That’ll be so great for my own resale value. I cannot be alone in this (perhaps slightly obsessive) behavior.
Everyone uses Zillow. It’s the trusted source of information on home prices, rental estimates, and other analytic tools for determining the value of nearly every available address in the US. But how? Through data transparency.
When Zillow launched in 2006, it leveraged county tax assessor data and other local government data on deeds, mortgages and real estate transactions. Of course, this remains a huge part of the company’s current data assets.
Much of this data had been freely available before 2006, but Zillow gave it to consumers in a new, comprehensible, standardized format — and for free.
As Stan Humphries, Chief Economist at Zillow told me in an interview this week, “Because we are leveraging open data, we also need to reflect openness philosophically and in practice. That is why we have never charged for access to data.”
In an effort to fully round out their database, in recent years Zillow has paid for data (rental listings, for example.) But, in keeping with the philosophy Humphries describes, those data are converted for free usage by consumers.
“Eventually, I think all data useful to consumers will be opened,” Humphries asserts. “And, as that happens, of course, the cost of providing data will go down.”
Humphries notes there is still plenty of room to grow, so Zillow is encouraging municipalities and county governments to move more data online, including housing permits, code violations, community planning information, and crime statistics. According to Zillow, the biggest challenges to opening these data sets are:
- a perception that there is unique monetary value in the data themselves
- a lack of standardization between municipalities
- the perceived costs of liberating data
“It is a work in progress,” Humphries says. “Although there are challenges, governments are seeing the benefits of opening data for the consumer. They see how companies like Yelp not only increase small business [see this Harvard study], but also help governments track down health code violators.”
There are real opportunities for businesses to leverage government open data — not in reporting statistics alone, but in giving the data context and providing insightful analysis. That’s how Zillow can show your neighborhood’s home sales over past six months *and* predict what your home will sell for tomorrow.
That might be useful information for my across-the-street neighbor.