Zillow and Artificial Intelligence

Zillow was one of the most interesting Real Estate platforms when it was first launched in 2004. For the first time, we got an inside glimpse of what our home values were without asking for a BPO (broker price opinion). However, as competition from other platforms such as Redfin came into existence, Zillow has been left as a kind of “commoners” MLS.

Who Uses Zestimates Anyways?

Zillow is great for regular folks who are trying to see what’s on the market. But no real investor uses the Zestimate as an accurate method of determining the final sales value of a home.

Side note: Redfin is surprisingly accurate. Apparently it’s because Redfin pulls it’s data from the actual MLS.

AI Makes It Better

Recently, Zillow has been making strides in their Zestimates algorithm, and has incorporated artificial intelligence into it’s system. It now uses convolutional neural networks that are trained on millions of images to determine the quality of the finishes in the home.

The system can tell if you’re using granite countertops, high end finishes, and if your home has great curb appeal based on the photos alone!

That Prize Money!

This is one of the ideas brought about by the ‘Zillow Prize’, a competition with a $1 million purse. It’s attracted thousands of data scientists to work on interesting problems to boost the Zestimates algorithm. Other ideas from the competition is using AI to determine how commutes and distances to parks affect the price as well.

Zestimates Are Getting Better

The company currently has over 1.6 million Zestimates, with 50,000 in the Bay Area. They say that the final sales price of a home will be within 5% of the Zestimate 84% of the time, and will be within 10%, 95% of the time.

The Future of Zillow

Based on my readings and what I hear on podcasts, artificial intelligence is amazing at one thing, prediction. With the right data, it will be able to predict what a home will sell for and may even be able to predict who the end buyer will be. It’s exciting to see a more accurate value of a home through the Zestimates.

Zillow, The Consultant

In the future, we may be able to use the platform to help us make decisions when it comes to adding certain finishes to our home.

For example we can ask Zillow if it’s worth it to add a refrigerator, an air conditioning unit, or an upgraded electrical panel to our home. We can even have it help us make design choices such as the paint color or types of cabinetry.

How awesome would it be if Zillow just gave us the optimal way to remodel a home to get the highest ROI!

What do you think?

Link to original article: https://www.bizjournals.com/sanjose/news/2019/07/01/zillow-new-zestimate-ai-home-quality.html

You can check out more information about Redfin at https://www.redfin.com/what-is-my-home-worth