KGCI: Real Estate on Air - Take Zillow Listings With A Grain Of Salt

Episode Date: November 7, 2025

Tactical, focused. Just like a top producer. Here's a sample from this week's Friday focus on KGCI, Real Estate on Air. Zillow has built a business by pretending to be a service for buyers, when in reality, it makes us money by selling that buyer's data to advertisers to its real customers, real estate agents that buy the data. There's a same technology that if you're not paying for the service as a customer, you are in fact the product.

And those people use Zillow. Now we're having their data sold without really understanding that, but more importantly, the information is just obviously inaccurate and that fact is public knowledge. How does a company dominate the real estate industry worth billions of dollars with inaccuracies and with its kind of deceptive approach? We'll get into that. I'm Bill Grouch. This is my weekly real estate market update. Before we get the detail in Zillow, let's talk about where the market is and then I'll show you how Zillow fits into that. So I maintain, and actually the rules of economies are that in an economy you have a trade-off between buyers and sellers at any point of time, that tells you what the market is.

And we want to analyze that by buyers on the interest rates, which determines the demand, and the sellers on the inventory. So let's take a look at on the buyer's side. The market is really made by interest rates. So we can see that this week interest rates inched up slightly or about the statement at 7.16%, which is really about the same as the same as, last week it's been in the same range now most of the year it's been between and this this graph goes back pretty far but if I go back to January last year you'll see we've been the range of 7% non-stop off and on a little higher a little lower this week we had some excitement it was a little higher at 7.2 7.3 came back down

but these rates are still good enough to create significant buyer demand in our marketplace we're gonna have a buyer's a seller's market given that level now how about on the seller side well there we look at the amount of homes that are for sale and the more homes for sale and there's too many that will cause prices to go down and when there's not enough like now it can cause prices to either stay high or go up if we take a look at the inventory right now uh 2024 we're at 6 539000 homes on the market that's a little more than last year by about 10 15 percent but it's lower than all years other than pandemic years mean the only years with lower inventory where 2009 i'm sorry 2019 20 and 21 and

2022. 2019 was higher, 2018 was higher, every year before that was higher inventory by percentages of my amount. So this tells, and you can see that slightly inventory is going down a little bit, whereas last year it kind of came up at this time of year. So inventory is still in a range where the market is very much in favor of sellers, not buyers, nationally. As long as that stays the case, we will not see massive price drops nationally without some change

in the overall economy. Now, of course, if we go to war, or there's a massive price drops nationally, we will not see massive change in the economy all bets are off. Now real estate is essentially a local business, what's like in LA, will continue to be a seller's market, not as strong as it was maybe during the high of the pandemic, but still, Altos research was such as it does a great job of market data for realtors, has it still at a 42. It's been in the range of 43, 42, 41, nonstop over the last year or so. All the indices seem to indicate the market is solid, if not slightly more towards the seller side than the buyer's side.

So overall, we have a significantly stable market that favors for now, by historical standards, the seller's market. So let's get into the news and take a look and see what's happening in the marketplace and then we can decide overall how that affects us. One is there was a big push a few years ago calling the Playa Vista area and Rina Ray area Silicon Beach and why that didn't really match up to the hype. It's very exciting at the beginning. Companies are moving in.

That's all down. Some of the key companies have stalled Snapchat, moved from Play Vista to Santa Monica, and has not continued to grow at the pace of other rivals. Another one famous startups in the area was, what was the name of it? The scooter company, and they went bankrupt and moved to Miami, moved to other area. But overall, the amount of investment in Los Angeles Starbtex, particularly that area, has not kept up. And as a result, the area is not the red hot growth area.

It's a nice area, it's close to the beach and services, but it's not the red-hot area that it was. And the real technology in Los Angeles has moved south to the space area, which is kind of following one. I used to work at Hughes Aircraft Company, which was south of the airport. And that area in El Segundo and Hawthorne, where SpaceX is, is just done fantastic. But the L.A. area of Silicon Beach just has not really covered the height that was there before and has not grown into what people were hoping for the market.

In other news, celebrities continue to flee California, the latest being Sylvester Stallone. I don't think he's a native California. I think he's from New York, but he moved here for a long time. How to Humbley Hill has raised his family here. But moving out, obviously, for taxes, the big parties that gets older, love celebrities are moving out to Nevada or Florida where there's no income tax rate. They won't say that's the reason why, but obviously that factors into it dramatically. And then more and more production is being handled outside of Los Angeles.

And so as actors and celebrities are filming internationally in other states, there's less of a reason to have to be in Los Angeles. So this is a bad trend because not only does this mean that his home is being sold, while the vendors who's a porth at home are being sold, but also indicative of the production. Sylvester Stallone produces films and other products and would determine where they're being filmed. And instead of being in Los Angeles these days, one would think that he would be more likely to do certain things closer to home in his new home of Miami. Again, bad news for the overall economy here in California. Speaking of bad news for California, you know, one of the big pushes has been for electric cars. And, you know, I'm not against electric cars.

I'm against the government dictating things. But one of the results of that is those cars don't get gas. And so EV customers, you know, have cars that are charged and they either have to pay for charging or they get a free where they're at. On their registration, they pay $100 a year. I didn't know that until I read this article. The average driver in California pays $300 a year in gas taxes. And so, of course, the government, all they care about is money. They can care less about what's best for the economy.

So they're pushing EVs but reduces their interest. So now they have a new pilot program where they're going to charge by the mile. They're going to charge two, three or four cents based on how many miles you drive. And that way they can, of course, with electronic cars, it's easy to track, easy to turn off. That's kind of the goals. They have kind of government control over the cars rather than letting people on their own. So this, I think, is just another indication that the taxes are causing problems, and then when the problems become apparent rather than fix the problem of the government needing too much taxes, the government just finds new ways to collect money. Speaking of ways to collect money in the news, the movement to repeal the death tax in California failed.

Howard Jarvis organization in the 1970s passed Proposition 13 that limited property tax increases. And the state legislation passed kind of a workaround on that. It used to be that with somebody passed, the errors would get the property, and they could use the assess value of the parent, let's say. So mom and dad passed, left you a property. The property tax assessment was based on their valuation, not your new valuation. And that got changed in a bill that was slicked in 2020. And as a result, ever since people have said, no, is it not constitutional and litigated that, but there was an attempt to get it on our ballot to repeal that law.

And unfortunately, well, it got more than half a million signatures, it didn't get enough to qualify in the ballot. So the death tax as far as the reassessment of property here in California will continue going forward. And then speaking more, and I have a podcast probate week where we talk about state planning regularly. The federal number for exemptions of a state is going to drop from $13.6 million in 2024 down to $7 million in 2020. Now it's a couple of years away. You might say, well, if only I had that kind of estate, doesn't really affect me. You know, I'm personally involved in the state where it was a $40 million state, but unfortunately, they may, and I can say this because it's public record information, they might need to sell

$10 million of assets in order to just pay the estate taxes. You might say, well, what's the big deal there? Well, maybe in this case, we don't have to sell the business, we're scrambling to keep the business going and keep the employees gainfully employed. But you can imagine it would be disappointing to work for a company and find up because the owner passed just to pay taxes, your company is going to be sold and you know, lose your job. And so also these estates are built with money that was already paid taxes on. You know, you make money, you pay taxes, you invest that into business and grow the business

or grow the asset. And then to pay taxes on it when you die would be, it's really a double taxation. So the exemption, and this is going to be a hot political topic, but I don't think anybody is going to step forward and argue for continuing that exemption going forward. President Trump got a lot of heat when that got passed in 2017, I don't see that really being pushed through again. So we need to prepare, I think, ultimately for that estate tax being, as it is now set up, to be dropping to $7 million. I often talk about California, make fun of California as a California native, and I've lived here, you know, 63 of my 65 years. I feel entitled to make fun of the state I see making so many mistakes. But more so when other states compete with California,

for the title of stupid policies. And one of the latest entrants in the attempt to out California, California, California, is Colorado. They passed a law recently called the right of refusal on properties. And this is a case where the state is not only going to ask for the right to buy five unit and up properties, they're in escrow, but even has more onerous for 15-unit and-up properties, where you need to list a property of the state, give them a chance to bid,

you get into a contract, and the state has a chance to overbid. So you can imagine as a buyer, how much work would you do on a property as far as due diligence, inspections, environmental reports? How much money would you spend knowing that if you find a good deal, you have to tell the state how much you're paying

and the state has the chance to match that I go higher? Of course, the state's not paying for it out of its pocket. The bureaucrat obviously wants more power, so you're going to see the states being overly aggressive. There's no incentive to manage less properties. There's only incentives to have more. more because that creates more raises and promotion opportunities for the state bureaucrats and so you can just imagine what a mess this is going to be so stay

tuned I'm on record now this one going forward but I would say that this is probably not only is that going to be a disaster but before it's a disaster as we copy by many other states who think well what could be wrong with the state competing taxpaying citizens for property how could that possibly go wrong and I think we'll find out how speaking of policies going wrong the LA homeless situation in Santa Monica really one of the centers of it imagine the shop owners are afraid the homeless population has impacted their business can you imagine that people sleeping on your sidewalks and defecating and urinating might scare away paying customers and so

the 3rd Street promenade which had been really a high-end marketplace is finding that you know post-pandemic and retail in general under pressure and then you add to it the fear of walking past stepping over and around in the smell of homeless people in this in the area has contributed to stores closing. And so what we have now is stores are closing. We have replacements with lower cost corporate companies rather than small local individual businesses. And as a result, the traffic's gone down.

One customer in this quote said the traffic's got down by 60% of shoppers going through the Third Street promenade. This went from being one of the highest and most beautiful shopping experiences, if not the United States, certainly California. to really just becoming kind of average or normal. Also the news, you may be following the commission lawsuit.

This is the con-drived lawsuit by politicians to destroy real estate agents and real estate industry and the government interest to dominate all businesses including real estate. And so here we have an article. I thought this was really funny. By Housing Wire, overblown rumors of demise, NER has lost only 45,000 members since the same. December. So there were about 1,500,000 real estate agents in America who were members of NER, National Association of Realtors. And this article Lamanson, only 45,000, which would be about

3% have left the, half the left the business, whose businesses have been, say, destroyed in the last year and as a result have left the industry. It's only 3%. Imagine if it's 3% of, say, real estate industry journalists lost their jobs. They would take a little different approach to that. But the other thing is this lawsuit hasn't even formally accepted yet by all parties and the implementation of the change of the law hasn't even gone into effect yet. It's almost like housing wire is trying to push people out early rather than waiting to see how the law does affect the business. Or maybe they're part of the policy goals to make it hard for real estate agents. I don't know. But either way, the article to me just shows how the real estate industry

is so co-opted by the advertisers and the large corporate players that it really is the demise of both the industry players, real estate agents, as well as, I think, consumers. Speaking of big, evil corporations, we have two today. One, the first entry will be Redfin. Now, this is a large corporation that's raised money on Wall Street, doesn't pay federal state taxes because they don't make money while paying out millions of dollars of compensation

to the executives and such. And so now the latest for Redfin, which originally was going to disrupt the real estate industry, now you can list your home for rent for Fran Redfin. So it's just interesting. In business, one of the key principles I've learned in my career is that almost all successful people are focused on something, focused on one particular need or problem at a time at least

and mastering it before we move on in the next one. There's rare exceptions. A lot of Musk is a rare exception of that rule. But most businesses you find are focused on one, one group they're trying to service. Here Redfin, you know, pretended to be about helping buyers buy property, but now they're focusing resources on listing rentals for free. Now, a couple problems of that. One I would say is that if you think that they're magnanimous, they're going to list your property for free, because they're just, they're just great people, you're wrong. They have

a scheme, I'm guessing the scheme is by having sellers list of property, they have their contact information and they can market to them and then over time move to replace real estate agents as a listing source and doing so I don't think there's a problem while being up front but when you make it look like no we're just helping you rent your property for free it's just dishonest it's another case of Redfin and these big corporate companies being dishonest because there's no way that they're interested in helping list rentals for free unless you're going to sell the lease to somebody or use the lease themselves Zillowl's done the same thing by,

because they sell the leads to real estate agents who wanna contact those sellers. In this case, Redfin doesn't advertise, they'll compete in that sense with Zillow, but they're obviously gonna just market those sellers and reuse their data in a way that customer didn't intend to. And I'm sure in fine print among the 20 pages of terms and conditions, they'll be something

they're saying, we can market to you forever, and we can text you and call you and drive you crazy. I'm sure that would be covered in their legal paperwork, but most people going into that won't understand, and that's what they're signing up for. Now, the other big evil twin of corporate, by far the biggest evil corporate player in real estate, would be Zillow.

They're by far the biggest residential real estate entity by dollars, by volume, by impact in the marketplace. And I would say by impact also negatively. Here's one example, their real push lately has been to be at the forefront of progressive politics. Not saying that that's good or bad, but that's just not the place for a business. If you're a stock-broke,

stock owner of Zillow, you would see them doing things that sell house does not play politics. The reason why they play politics is that allows them to continue their monopolistic status. Anybody would look at the market and say how Zillow have such control of the advertising and listings in the retail residential market, maybe we should break them up somehow or limit some of the side businesses they're involved with. In this case, by pandering to politicians, they get a free pass from any regulation. The latest is black homeownership has risen, but not to 2004 level. And then Zillow wants to play the night in this in shedding armor by saying the market is inherently discriminatory and has bias, and they're going to eliminate that in their computer system.

It's fascinating to me, if you look at the dates, 2004 was the high point of black homeownership. And so of the 20 years since then, we've had a black president for eight of those years, a black vice president for three of those years. And literally they're saying that bias and discrimination have increased consistently since 2004 to where home ownership now is less in the black industry because of that. It's not because of the inflation has hurt the black community more. It's not because the policies that are in place hurt the black community more. It must be, they're saying by definition, bias discrimination. And I think as a real estate actor, I can say I don't think that's the case. There are plenty of black and in every type of real estate agent.

Those of us cross over into every group. We'll sell a house or list of house for anybody. I think the commissions are the great equalizer. And to blame the industry of bias and discrimination and present yourself as the solution because of your high technology or something, I think it's just so patently dishonest and pandering to a group of people

without offering a real solution. Now, another case, I think, is their recent announcement that their new Turing agreement helps agents stay ahead of any of our settlement changes. Now, a couple of things here. First off, the Turing agreement is obviously something that Zillow needs because one of the outcomes of this lawsuit threatens to be that every buyer has to have a written agreement with the parties that show the property.

And so Zillow is offering, hey, make the agreement with us, and that way we can show you all the properties on our website, as opposed to the agent who might want to have that agreement, so they can then create a relationship with a customer and give them service as a customer service from house to house. So really, this is not Zillow helping agents. This is Zillow competing with agents, and in fact, at the same time, trying to destroy the relationship agents have with our association NER. NER, to their credit, has really scrambled to provide tools and resources and training to understand how we can comply with the lawsuit. And then at the California, California level, California Association realtors, has as well gone deeper, in my opinion.

Our local associations have programs. I talked to an attorney yesterday who has a program coming up. My company, EXP, has programs. So we're all working on this. It's not that Zillow has defined something new, but of course they're going to tout their program as helping agents stay ahead of the NER changes. I don't think that's the case. But here's the other part about this.

I think that they're touting something that really is of no value to the customer, meaning I understand that to cover ourselves in this lawsuit as agents, we need to have the buyer sign some sort of an agreement. But the reality is, in business, if there's no consideration, if somebody's not paying you money in exchange for an agreement, then there's no value to that relationship. And these tour agreements really have no value. You're not paying the agent to show you the property.

How much can you hold them to an expectation for free? And so at some point, the idea of damages or holding people accountable, Zillow or an agent, is really specious in contract. So I don't know how this plays out. I know it sounds great to say we're helping you solve the problem with the commissions. So I talked about Zillow twice, but really the most amazing article was by one of Zillow's corporate partners, Yahoo Finance. Yahoo Finance is one of those companies that parrots everything Zillow says, always pretty positive of them. And so here's an article that purports to say some of the things you should look for when browsing Zill listings,

not if you browse Zill listings, not why you shouldn't browse Zill Listings. but when you're browsing Zill listings as though that's something that everybody does and everybody should do But when you read the article, what's comical to me at least is how they point out Not only should you take their data with a grain of salt as the author says I would say a salt shaker held the whole package So some of the things quote if you go through this article this is on Yahoo finance I linked to it I'm better quote a few pieces here the best thing I do if you find a listing of Zillow is to send it to your agent So they can provide you the actual listing for the MLS to ensure

full accuracy and other pertinent information that's given to agents but not to the public. Meaning, the agents have better information, is more accurate and more pertinent. Well, why don't you just go to the agent in the first place? Every agent almost has a search tool for the MLS that they belong to. Zillow has one that's national in scope.

And because they combine them all together, has one of the best national ones. But each of us agents blind with MLS, we all have tools either through our MLS or through a brokerage that customers can use. So really, if you want to service the customers, I would say ditch the Zillow if you're working in one area and work with an agent who has access to MLS that they can offer you. So the later article, this is hysterical.

It says the Department of Flood Zone, or the rooms in the terrible shape are that aren't visible. Agents have access information that Zillow may not show, such as notes about serious defects. It also says beware of photo tricks. You're hard to spotless, you're working with an experienced agent. The tricks to hide major issues. So these are things that this article, which is telling you how to use Zillow. use Zillow is scary about. It also says that there's an area of properties you should avoid called pre-foreclosure. And I agree. This is just completely misleading data. And again,

quoting the article, if you see a house labels pre-foreclosure, it's a trap. These aren't listings. These are agents who pay for Zillow leads, and the properties are just a way to get buyers to click and find an agent button and send them to a paying agent. In my experience, So many times the properties have been wrongly termed in Zillow, maybe they have the wrong city or wrong state. So a property would appear for sale for $200,000 in California, which is not existed, and really they put the wrong state in.

It should be somewhere else. Well, you can't call Zillow. It's very hard to get a whole of them to respond. And, of course, they don't really want to correct information because it creates so many more clicks than they're selling clicks to their agents overall. Even though they're moving to a percentage basis, there's still the value of the clicks on the job.

traffic to them. Then later in the article, it says, and this is an interesting quote, that beware of the Zestimit, the Zillow estimate. It says a particular for off-market properties, the margin of error is 7.9%. Now, I don't think people who haven't taken statistics understand what margin of error means. Generally it means two standard deviations, or 68% of the time, it's within that range, which also means, by definition, that 32% of the time, the variance is 8% or more. Well, that's a lot off. I don't think people really understand

how far off those are. And then they also say there's so many misleading properties that are scams that you should be careful of. So all this is from the most powerful corporation in real estate America, a $8 billion company that just dominates the market and is disrupting the market to use their terms and disrupting agents

and yet not paying any federal taxes or state taxes as a general rule. So again, I just think Zillow is another example of greedy corporations that are destroying industries for the average American to the benefit of their Wall Street masters. So obviously I've talked a lot about bad companies and bad state practices and what should you do? Well, one friend of mine is taking things in his own hand and he's actually going to do something about personally, my good friend Dan Tran, who I know through the title business, successful

businessmen helping real estate agents and investors and professionals, is running for office. He's running for the California State Assembly in District 48, which is Azusa, Glendora, West Covina area. Great guy. I have on here an interview I did with him. If you have the email version, you can click on the interview. If you want to donate, even if you're out of the area, you're allowed to donate to those causes here in California. If you want to volunteer as well, he's a great guy. And here's the thing I want to say about him. I have no idea what policies are. I don't really care. I don't know which party he's with, though I have a suspicion. He's a great guy, he's a businessman, he has the values we have.

He's a second generation American whose parents came here from Vietnam with nothing, as you learned in the interview. Came here from Vietnam and the Catholic Church gave each of $12, and they built a life of family and American values are really the kind of story that make our country great. And so Dan wants to take responsibility to continue the gift he's received for the rest of us. So there's a positive example of what you can do, but what should you do about buying real estate or selling real estate Well, I always tell people, it's depending on where you are, what your needs are. If you're looking to buy a property, it's a great time to buy. It was a little less competition than was last year, but still there's, you know, properties

being bought and sold every day. If you're looking to sell, now there's a good time to sell. Let's get the strategy that works for you to get you the best outcome at the end of the day. As always, I'm available. You can call text or email me. I'm on social media at Bill Goes Probate. If you like this video, please give a thumbs up or like it or whatever. Share it.

If you have comments, let me know. And now I'll get back to you. As always, make today your best day ever. Thank you so much.