Zillow Estamates

"others that have put their houses on zillow have gone down in value but those that do not list on zillow have gone up in value."

Not sure what you are basing this claim on or actually suggesting...Are you saying homes not listed on Zillow are Selling for more than Comparable homes in the same neighborhood that are listed on Zillow?

"zillow is bad for the real estate market"
Examples to support this claim or accusation

If you are talking about the Zestimate then it's my opinion Zillow makes it very clear and always has that the Zestimate DOES NOT REPRESENT THE VALUE OF ANY PROPERTY..it is an estimate based on partial information and Zillow has always said so...a starting point/a tool to use

"The Zestimate (pronounced ZEST-ti-met, rhymes with estimate) home valuation is Zillow's estimated market value, computed using a proprietary formula. It is not an appraisal. It is a starting point in determining a home's value. The Zestimate is pulled from data; your real estate agent or appraiser physically inspects the home and takes special features, location, and market conditions into account. Variations in price also occur because of negotiating factors, closing costs, and timing of closing. We encourage buyers, sellers, and homeowners to supplement Zillow's information by doing other research such as:

    * Getting a Comparative Market Analysis (CMA) from a real estate agent

    * Getting an appraisal from a professional appraiser

    * Visiting the house (whenever possible)

    * Creating your own estimate using the My Estimator home valuation tool"
What is a Zestimate?...(Zillow FAQ the above is from & which contains much more info)

Zestimate is just an available tool and DOES NOT determine the Value of any Property nor does Zillow suggest or claim it does (As you can see from the above they point out that a CMA and an Appraisal consider far more factors and are more accurate...They Recommend you use other sources to get a more accurate ESTIMATE..