SocketSite recently dismantled the methodology relied on in SF Gate’s “borderline reckless” reporting of a $4,255.00 San Francisco median rental rate last month based on Zillow figures for houses and condos (not “apartments”). Pitting Zillow’s data against Zumper’s, Curbed SF finds a way that they can both be right.
The short version is that the prices are different because math. Unlike home sales, which are listed in an MLS and recorded in public record, there is no reliable data on apartment listings or rentals. As a result, Zillow uses an algorithm that tracks the data that is available (condos, houses, TICs, etc.) and treats those listings as substitute goods for the renting of apartments. The algorithm tracks changes in price over time, and – even if the actual numbers are not accurate – at least everything is in the right proportion.