Redfin Estimate might be making homes more expensive

Brokerage founder Joseph Alongi claims tool has played a large role in rising prices

National /
Oct.October 02, 2018 10:00 AM

(Credit: iStock)

Redfin Estimate could be inflating the value of certain homes.

Joseph Alongi, founder of the low-fee brokerage SoldNest, recently argued that the company has had a big impact over the past few years on rising home prices, according to Inman. He told the publication that Redfin’s estimate would adjust right after the home hit the market and then adjust two or three more times within the first two or three days. He believes user engagement plays a role as well.

At one house in Silicon Valley listed for $1.78 million, for instance, one of Alongi’s clients made a $1.9 million offer. The next day, the Redfin estimate hit $1.95 million, and it reached $2.21 million by the third day.

He maintains that part of the issue is Redfin’s status as a brokerage, meaning most of its revenue comes from agents making a commission.

A Redfin spokesperson told Inman that the company’s Estimate tool is automatically updated daily for homes on the market and weekly for homes off the market.

“The Redfin Estimate uses more than 500 data points, including market data and neighborhood information, to generate an estimated value for a property,” the spokesperson said. “We can’t share more explicit details about the kind of data the algorithm analyzes.” [Inman] – Eddie Small


Related Articles

arrow_forward_ios
30 Front Street & 294 Park Place (Streeteasy, Getty)
Brooklyn luxury market can’t shake slump
Brooklyn luxury market can’t shake slump
From left: 182 East 64th Street and 520 West 28th Street (Getty Images, Brown Harris Stevens, Godsfriendchuck, CC BY-SA 4.0 - via Wikimedia Commons)
Manhattan luxury contracts hold steady in September
Manhattan luxury contracts hold steady in September
Ryan Serhant
Ryan Serhant talks Compass, reality TV and more on TRD podcast
Ryan Serhant talks Compass, reality TV and more on TRD podcast
Frank Lloyd Wright with 1425 Valley View Drive (Getty, Re/Max)
Unique Frank Lloyd Wright home available … for now
Unique Frank Lloyd Wright home available … for now
A photo illustration of the Arizona Ghost Town Museum in Pearce, Arizona (Getty Images, Facebook/oldpearcepottery)
Night at the museum: Ghost town general store turned-home lists at $1M
Night at the museum: Ghost town general store turned-home lists at $1M
Ben Simmons and Olympia Dumbo (Photo Illustration by Steven Dilakian for The Real Deal with Getty Images and Olympia Dumbo)
Fortis’ Olympia Dumbo lures Brooklyn Nets star
Fortis’ Olympia Dumbo lures Brooklyn Nets star
Fredrik Eklund and John Gomes (The Society Group, 53w53)
Eklund-Gomes couples 53W53 open house with magazine launch
Eklund-Gomes couples 53W53 open house with magazine launch
Alec Baldwin with 335 Town Lane (Getty, Hampton Real Estate)
Alec Baldwin bailing on Amagansett estate
Alec Baldwin bailing on Amagansett estate
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...