Compass claims a $5,590 Zillow tax, but the maths not mathing

Compass put out research this week saying homes shown on Zillow sold for 1.3% less than homes Zillow had banned. Within two days, three different groups of economists went after it — on the size of the sample, on missing controls, on the fact that every listing came from Compass’ own business. They called it the ‘Zillow tax.’ Every one of those complaints is fair. Not one of them found the real problem. The problem isn’t how they built the sample. It’s what they measured. The caption on that post is flat wrong. Homes shown on Zillow did not sell for 1.3% less. A misstatement that big has another name, and plenty of people would use it. Here’s why. What they actually measured Per Compass’ own research release, the company looked at 296,966 of its listings from January 2025 through May 2026. Of those, 806 were banned by Zillow. The banned homes came in at 100% of their asking price. The homes on Zillow came in at 98.7%. Compass took that gap, multiplied it against the price of a typical American home, and called it a “$5,590 Zillow tax.” Now here’s the part that matters. It does not measure how much money the seller walked away with. It can’t. Because the asking price isn’t a fact ab...