An April 5 article that ranked the Denver metro area's real estate market as the nation's second worst-selling elicited objection from the city's real estate community. Some Realtors and real estate bloggers disagreed with the housing inventory numbers, provided by Zillow.com, that contributed to the rankings.
Many felt that Zillow's numbers, which showed a 27% year-over-year increase in homes for sale on the site and an inventory of over 42,000 unsold properties, were inflated, because the site hosts multiple same-property listings, and transactions may not be recorded as quickly as they occur. This means properties could be on Zillow, but no longer on the market.
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Zillow's metric measured inventory from January 2009 to January 2010, the latest available when the article ran. Metrolist, a firm that collects and analyzes Colorado real estate data, shows a March 2010 inventory of 20,073.
Zillow.com confirmed that double counting was possible. Zillow spokeswoman Katie Curnutte says that Zillow's numbers represent the homes for sale on the site, and that data from January will differ from any count that's more current. She added that the company regularly takes on new partners who provide the site with listings, skewing year-over-year comparisons.
"It can be difficult to derive any assumptions about market conditions from the year-over-year numbers," she says.
Zillow provided Forbes.com with year-over-year homes-for-sale numbers for each of the metropolitan statistical areas examined; each metro was scored by the same measures. Since Zillow has acknowledged that these numbers may have been artificially increased, Forbes.com has decided to limit the use of year-over-year homes-for-sale statistics from the data provider.
"Though Zillow's numbers allowed us to compare the number of homes for sale across the country's metros," says Lucy Maher, executive editor, Forbes, "we recognize that these numbers may not have given us an accurate look at local inventories."
In addition to the number of homes for sale on Zillow.com, used to measure inventory, the story looked at home price data from the National Association of Realtors; and sales rates from Moody's Economy.com. The article looked at each of the country's Metropolitan Statistical Areas with a population of more than one million.
Metrolist's data looked at the housing market two months later. What's more, it may not account for all foreclosures and new home sales. Still, Metrolist spokeswoman Melissa Olson says that those differences alone can't explain why Zillow reported over twice as many homes for sale than Metrolist.
Convenience is a nice to have but there is no substitute for the advise of a licensed professional in real estate.
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