Forbes-Gate continues with removal of Denver articles

What is up with Forbes.com?

After heavy criticism from Denver-area Realtors, economists, and even Denver Mayor John Hickenlooper, Forbes.com wrote another article, backing off the first. The first article ranked Denver the second worst in the nation as a housing sales market, based on data it said it got from Zillow.com. Since that article, Zillow.com has said it did not supply that information to Forbes.com, and would have advised it not to use that information, as it is constantly changing, as Zillow adds real estate partners. Forbes responded by explaining that it a second article.

Forbes.com, an online version of the Forbes magazine, has since removed both articles.

Kraft not letting Forbes off the hook

Here is what Denver Realtor Kristal Kraft wrote about Forbe’s decision on Friday:

“If you have been reading my last several posts, you will be aware of how Forbes placed Denver as #2 of the Worst Housing Markets coming as a severe shock to real estate professionals who watch the market, and seasoned veteran of the Denver real estate reporting world, John Rebchook, Mayor John Hickenlooper and scores of others,” Kraft wrote on her blog. ” Today Forbes deleted not one, but two online posts relating to the false and inflated stats found by writer Francesca Levy. The report came as a surprise to many experienced people who watch and know the Denver real estate market. Many who asked or in the case of the Mayor DEMANDED a retraction, I was told personally by Francesca Levy that Forbes doesn’t do retractions, just more reporting. Well Forbes second article failed to take personal account for making the mistake to begin with. Instead they pointed the blame at Zillow, who had Francesca Levy bothered to ask would have informed (suggested) she not use the stats they presented for her specific article.”

Zillow’s take

Here is what Spencer Rascoff, COO of Seattle-based Zillow had to say, when he stepped into the Forbes-fray.

“Earlier this month, Forbes.com published a story naming the “America’s Worst-Selling Housing Markets,” Rascoff wrote. “The reporter used data from the National Association of Realtors, Moody’s Economy.com and Zillow to create an index that ranked metropolitan statistical areas. Much to the confusion of Denver real estate professionals, the Denver region was number two on the Forbes.com list. One of the statistics Forbes.com cited in the article was a number from Zillow which Forbes.com referred to as “inventory”. There has been lots of confusion about this story and the data in it. Forbes published a follow-up last week, but I’d like to clarify a few points.

· Zillow did not name Denver one of the worst-selling housing markets. Forbes.com used one statistic from Zillow, along with statistics from NAR and Moody’s, to create their own index. Zillow was not consulted on the construction of this index.

· The number Forbes.com took off of our website was labeled on Zillow as “Homes for Sale on Zillow” in the month of January, and that’s what it captured. It was never labeled as a total inventory number, and we never presented it to them as such, in writing or verbally.

“The methodology behind the statistic which the Forbes.com reporter pulled from Zillow.com showed the cumulative number of homes listed for sale on Zillow during the month, not a snapshot at a single point in time. This explains why the number wouldn’t match MLS inventory statistics, and further explains why the reporter shouldn’t have used it in the way that she did. (And had the reporter contacted us before writing the article, we would have recommended that she not use it in the way that she did.)

“In fact, the median daily number of listings in March posted on Zillow was 31,947 – extremely close to the 31,740 listings reported by a Denver economist using Metrolist MLS data,” Rascoff continued. (Rebchook note: Actually, he is referring to economist Patty Silverstein. She used Zillow data, not MLS data. For that article, please visit a previous blog.)

Rascoff’s response went on to say: “But the cumulative number of listings on Zillow during March (which is what the “Homes for Sale on Zillow” metric represents) was 43,157 listings. In other words, new listings came onto the market and some homes came off the market. The point is that the discrepancy was caused by the Forbes.com reporter not reading the fine print on the Zillow website and not calling her Zillow PR contact; it was not due to inaccuracies in Zillow data.

Although our January listings number was representative of the number of homes on the market at the time, we have added partners in the past year, which have brought us new sources of listings. We routinely warn media against using year-over-year numbers when referring to homes on Zillow, since changes might be more reflective of new partnerships than market conditions.

Contrary to some blog reports, Forbes.com did not say they would stop using Zillow data. They said they would limit the use of year-over-year comparisons when using the metric “Homes for Sale on Zillow.” (We support this decision, and as I said above we would have discouraged the use of this statistic anyway since the reporter was trying to show total overall inventory.) On the contrary, Forbes and Forbes.com (and dozens of other media sources) continue to use Zillow data, and in fact I’m personally one of five proud members of the Forbes Expert Real Estate Panel which conducts monthly online discussions of real estate issues (and frequently uses Zillow data).”

He concluded by saying: “We stand behind the accuracy of our data, but like all statistics, they can be misleading if not properly understood or explained. It’s regrettable that this situation occurred.”