United States of America eSeries: The problem with Zestimates 🏡

The problem with Zestimates 🏡

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Hello! Thanks for pausing your Zillow scroll to be here. Just for you, we've got some real estate news. Let's get into it.

By Allison Morrow

📉 ADDITION IS HARD

US stocks tumbled Thursday, because traders apparently forgot how to do math.

WHAT HAPPENED

All three major indexes — the Dow, S&P 500 and the Nasdaq — fell 0.9% after headlines came out later in the day about the Biden administration's plans to raise taxes on the wealthy.

Now, if there's one thing Wall Street loathes it is higher taxes. If you want to scare a banker, just tell them capital gains tax hikes are coming and watch how fast they slip into Sperrys and summon their yacht staff for a quick trip to the Caymans.

Stocks were up earlier in the day, cheered by news that weekly unemployment filings hit a pandemic-era low below 600,000. But they took a sudden dive in the afternoon after some media reports sent traders into a tizzy. "Biden Eyeing Tax Rate as High as 43.4% in Next Economic Package," read one from Bloomberg, where many bankers get their news.

But here's the thing: that number doesn't seem to be new news. Biden has repeatedly cited a marginal tax increase to 39.6% for the wealthy, plus a 3.8% tax on investment income to fund the Affordable Care Act. This much was already known in March.

Look, math was never my thing either but let's give this a go: 39.6 + 3.8 is … *dramatically taps calculator* … yup, still 43.4.

"This does not seem like particularly new information," said Michael Reinking, senior market strategist at the New York Stock Exchange, in a note.

CNN Business' Anneken Tappe has more on what the heck happened.

🏭 TOO GOOD TO BE TRUE

The groundbreaking for the Foxconn facility in 2018.

Back in 2017, President Trump hailed plans by Foxconn to build a massive electronics factory in Wisconsin. It was to be a Silicon Valley in the heart of the industrial Midwest, with an estimated 13,000 new jobs. The American manufacturing renaissance was coming.

If it all seemed too good to be true, that's because it was.

WHAT HAPPENED

Four years later, the site of the plant is a collection of mostly empty buildings without any high-tech products to build.

This week, the original $10 billion deal between Wisconsin's economic-development organization and Foxconn, a Taiwanese electronics maker, was officially scaled back to a $672 million investment that will create fewer than 1,500 jobs.

WHY?

A lot can happen in four years. The original deal was signed between Republican Gov. Scott Walker, who lost his seat to Democrat Tony Evers in 2018, and Foxconn's founder, Terry Gou, who stepped down in 2019.

Evers campaigned on his opposition to the enormous size of the deal. "The last deal didn't work for Wisconsin, and that doesn't work for me," he said.

The original deal specified that Foxconn, which is known for manufacturing iPhones in China, had to build a specific kind of high-end monitors — in addition to making the investment and hitting hiring quotas — to qualify for nearly $3 billion in government incentives.

Under the terms of the new deal, Foxconn is eligible for just $80 million in incentives, and has greater flexibility to determine the types of products it manufactures.

CNN Business' Chris Isidore has more on what's happening to the massive plant, which Trump once hailed as the "eighth wonder of the world."

🏘️ DON'T TRUST THE ZESTIMATE

The housing frenzy is far from over.

Home prices are setting new records as buyers scramble to make the winning offer on a limited number of properties for sale. High demand, low supply, prices go up, you know the drill.

Last month, the median sale price was a record $329,100 — the highest median price since the National Association of Realtors began tracking it in 1999. The median price, which includes existing single-family homes, townhomes, condos and co-ops, was up a record 17.2% from a year ago.

TIME TO SELL?

Don't reach for your Zillow app just yet. Or do, but like, also keep reading…

Your home's "Zestimate" may have you saucer-eyed, my colleague Anna Bahney writes, but it may be way off the mark. Same goes for similar tools from Redfin and Realtor.com.

Hundreds of factors go into the calculations for these estimates, including local real estate databases, sale records over time, property records, tax records and other sources.

While accuracy is improving, Anna found that online estimates can vary by hundreds of thousands of dollars, and the fast pace of the market is making it even harder to get an accurate read. For off-market homes, Zillow's Zestimate has a median error rate of 7.3%.

Which isn't to say you shouldn't check it out — just remember it's a starting point, and be prepared for marketplace realities to set in.

🍪 SNACK TIME

It's been a while since we did a good old-fashioned food news roundup, and I'm hungry so let's get into it.

🌮 THE BELL
Taco Bell is testing a new vegetarian offering called the "Cravetarian Taco." The unfortunately named dish features a new "proprietary" plant-based protein… but is only available at one location in Orange County, California, till the end of this month. TB, why are you teasing us like that?

🧀 SAY CHEESE
Chipotle's quesadillas hit nationwide menus last month and, no surprise, they're a hit. (Chipotle figured out what Pizza Hut learned a long time ago: Just add more cheese!) About 10% of all orders now include a quesadilla, the chain's CEO said this week. Because sometimes a burrito the size of your head isn't enough.

🍪COOKIES
Whole Foods is teaming up with Levain, the New York bakery known for its decadent cookies and long lines of people that gunk up the sidewalk near its Upper West Side location, inviting the scorn of New Yorkers who are walkin' here!

Anyway, Whole Foods is selling frozen Levain cookies nationwide now, if you're into big gooey cookies (even though thinner, slightly crispy cookies have been scientifically shown to taste better. Fight me.)