Community activist groups are complaining to the FTC that real-estate site Zillow undervalues the homes of poor blacks and Latinos (and thus could be used to support discriminatory lending practices). The problem is that those are not the only home values Zillow is getting wrong. The site is just too spotty when it comes to its "Zestimates." As former B2.0er Damon Darlin reports in the NYT:
For instance, in the San Francisco area, 76 percent of estimates are within 10 percent of the selling price, but in the New York City area, accuracy falls to 52 percent.
Zillow's strategy seems to be to offer real estate porn to middle-aged homeowners. ("Ooh, look how much my house is worth!"). But as more people begin to realize that the underlying data on the site cannot be trusted, the backlash won't be limited to just community activists.