Introducing a new and improved Zestimate algorithm (2024)

The algorithm that powers Zillow’s signature home valuation tool — the Zestimate — is getting an upgrade. Now more accurate than ever, the new Zestimate uses computer vision to analyze photos of a home to understand not just its facts and figures, but its quality and curb appeal. The Zestimate also now incorporates real-time data for homes listed for sale, including its listing price and how many days it’s been on the market.

For context, when Zillow first launched the Zestimate in 2006, it marked the first time that homeowners could find an instant, free estimate of their home’s value. It empowered people with information and fundamentally changed the dynamics in the real estate industry. We’ve worked over the last 13 years to improve it, from adding new features and more data sources to enabling homeowners to edit their home facts. Thanks to these improvements over time, I’m proud to say that the Zestimate now has a median error rate of less than 2 percent for homes listed for sale, meaning half of all Zestimates fall within 2 percent of the home’s eventual sales price.

From a technical standpoint, incorporating computer vision and advanced machine learning models into the Zestimate algorithm enables us, for first time, to give consumers a more quantitative accounting of the qualitative aspects of their home. We’ve always known that photos provide consumers a rich source of information about a home’s quality. Yet before recent advances in machine learning, there was no way for computers to look at photos of a home and get the same information that humans do. Now, we’ve taught the Zestimate to discern quality by training convolutional neural networks with millions of photos of homes on Zillow, and asking them to learn the visual cues that signal a home feature’s quality. For instance, if a kitchen has granite countertops, the Zestimate now knows — based on the granite countertop’s pixels in the home photo — that the home is likely going to sell for a little more.

This release also marks the first time we are directly evaluating a home’s list price, listing description, and how many days it’s been on the market, as part of the Zestimate’s calculations. As part of our data science team’s work to uncover new ideas for improving the Zestimate, we explored different ways for incorporating list price into the Zestimate. Overall, we saw how the list price and other real-time listing data helped our algorithm pick up on signals about a homeowner and agent’s listing strategy, and what the homeowner believes their home is worth. Evaluating these signals enabled us to better estimate what a home would sell for.

Most importantly, we now incorporate these signals into the Zestimates for homes on the market in real time — making it the most updated, accurate estimate of an on-market home’s value we’ve ever provided. Think about what that means for consumers to get an up-to-the-second snapshot of what’s going on in the local market and how that impacts their home. For comparison, when we first launched the Zestimate, listings were updated monthly as new information became available. That’s a big improvement!

Incorporating these new technologies and data sources not only adds another dimension of sophistication to the Zestimate’s infrastructure, it helps provide a more accurate home value estimate for millions of homes across the country, particularly those currently for sale.

As I reflect on the journey that culminated in today’s release, I’d be remiss not to mention that the new Zestimate is the product of a push that began in 2015 when we began leveraging cloud-based services for data storage and computation. We adopted a new data language and infrastructure and, in 2017, threw open the doors to new ideas through the Zillow Prize, a two-year data science competition that drew more than 3,800 entrants from 91 different countries. Innovative ideas from the winning Zillow Prize team are already being incorporated into the new Zestimate, including sophisticated machine learning techniques to identify and account for special home features, like the number of bathroom fixtures; location details like commute times; and a home’s proximity to a park or freeway.

Today’s release represents another milestone along that journey: an algorithm that leverages machine learning across our data-rich platform to provide consumers with the most accurate information about a home’s estimated value. It also embodies the incredible brain power, hard work, and collaboration among ourdata engineering, data science, AI and machine learning teams, who are constantly finding new ways to innovate.

While we’re excited about this release, it’s by no means the last stop. Our multiple data sources, accumulated over the past 13 years, and the data underlying the Zestimate provide Zillow with both a comprehensive representation of the U.S. housing stock and an incredible data advantage. As we continue to refine the Zestimate algorithm, we’ll work toward even more hyper-local and hyper-specific models capable of discerning how different housing markets value certain home features.

Our commitment to accuracy, combined with 13 years of experience valuing millions of homes across the country, is the bedrock of our business. It’s also a key factor as we ramp up our business of changing the way people buy and sell homes throughZillow Offers, our home buying service that allows sellers in eligible markets to skip showings, repairs and open houses by selling directly to Zillow.

I’m energized by our work to both evolve the Zestimate and fundamentally change the way people buy and sell homes. We’ll continue to generate, gather, and integrate innovative technology and ideas so that consumers have the confidence that our home valuations are the best place to start their home journey.

Originally published on the Zillow Group Tech Blog (medium.com/zg-tech-blog/) on June 27, 2019.

Introducing a new and improved Zestimate algorithm (2024)

FAQs

Introducing a new and improved Zestimate algorithm? ›

The new Zestimate algorithm leverages neural networks, the latest machine learning approach, and incorporates deeper history of property data such as sales transactions, tax assessments and public records, in addition to home details such as square footage and location.

How to improve Zillow zestimate? ›

How to change your Zestimate. One of the easiest ways to change your Zesimate is by editing your home's facts on the site. A real appraiser will look at the features of your home to decide it's worth. Now you can update your home facts in Zillow to reflect some of the things an appraisal would typically show.

What is the zestimate algorithm? ›

The Zestimate® home valuation model is Zillow's estimate of a home's market value. A Zestimate incorporates public, MLS and user-submitted data into Zillow's proprietary formula, also taking into account home facts, location and market trends. It is not an appraisal and can't be used in place of an appraisal.

When did Zillow introduce Zestimate? ›

Since its launch in February 2006, the Zestimate has evolved from providing 40 million homes with an estimated home value updated monthly to covering more than 100 million homes in the U.S. with estimates that react to market trends several times a week, all while improving the accuracy of the estimates themselves.

Does Zillow have an algorithm? ›

Zillow's unique algorithm updates its collection of property values multiple times a week, based on information from both public data, industry data, and user-submitted data.

What factors into a zestimate? ›

The Zestimate takes into account:
  • Home details like square footage, location and the number of bedrooms and bathrooms.
  • On-market data such as listing price, description, comparable homes in the area and days on the market.
  • Off-market data such as tax assessments, prior sales and other publicly available records.
Apr 13, 2022

How to increase views on Zillow? ›

Here's how to make your home listing stand out online.
  1. A home with all the fixings.
  2. Declutter and depersonalize.
  3. Make a great first impression.
  4. Take advantage of Zillow Immerse.
  5. Add a 3D Home tour and interactive floor plan.
  6. Write a compelling listing description.
Apr 17, 2024

Why did Zillow Ibuy fail? ›

The company ended up making thousands of above-market offers to homeowners. Zillow attributed the mishap to its technology, blaming its iBuying algorithms -- called "Zestimates" -- for inaccurately predicting the values of homes.

What is more accurate than Zestimate? ›

Zillow: Redfin is more accurate when valuing homes. Both Zillow and Redfin give homes an approximate value, but the Zestimate provided by Zillow has proven slightly less accurate than Redfin's estimate.

How does Zillow determine zestimates? ›

To calculate a Zestimate, Zillow uses a sophisticated neural network-based model that incorporates data from county and tax assessor records and direct feeds from hundreds of multiple listing services and brokerages. Neural networks are artificial intelligence systems that imitate how the human brain works.

What is the Zillow controversy? ›

If you ask almost any realtor, they'll say the controversy with Zillow estimates is that they're inaccurate. As a result, the platform can give homeowners or prospective home buyers unrealistic expectations about how much a home is worth.

Did Zillow get sued for Zestimate? ›

Last year, a real estate lawyer in Illinois sued Zillow, alleging that the Zestimate tool constitutes an appraisal and created a “tremendous roadblock” to selling a home. That case was eventually dismissed, but the lawyer, Barbara Andersen, later refiled and her amended complaint is still pending.

Why did Zestimate go away? ›

We do not delete Zestimate®. However, for some homes we may not have enough data to provide a home valuation that meets our standards for accuracy. In these instances, we do not publish the Zestimate® until more data can be obtained.

Why are Zillow estimates so low? ›

There are several reasons why Zillow's Zestimate may be inaccurate. For one, the feature relies heavily on publicly available data, such as property tax records and past sales data. This means that it may not take into account certain factors, such as renovations or additions to a home, that could affect its value.

What programming languages does Zillow use? ›

Site Info - Zillow.com
  • JavaScript.
  • Java. used on inner pages.
  • JavaScript.
  • Modernizr. used on inner pages.
  • YUI Library 3.18.1. 0% of sites use a newer version. used on inner pages.
  • Node.js.
  • Envoy.
  • Tomcat. used on inner pages.

Does Zillow have a competitive advantage? ›

Zillow's strong brand has become synonymous with residential real estate, which is a significant strength in attracting and retaining users. Technological Innovation and Data Science: Zillow Group Inc's competitive edge is further sharpened by its superior data science and technology.

Why is my Zillow estimate so low compared to neighbors? ›

If your home has additions or renovations that don't show up in the data, then its estimated value will not reflect those changes. Errors do happen, so your value also may be low because of outdated or incorrect information about its previous sales prices or tax history.

Is Zillow's zestimate accurate? ›

These numbers show that the Zestimate is generally good at getting within 20% of the market price, gets within 10% a little more than half the time, and only gets within 5% a third of the time. Roughly 20% of properties are off by 20% or more.

Why did my zestimate drop so much? ›

Factors such as algorithm changes, missing data, market shifts, or even incorrectly listed information can affect the accuracy of Zillow's estimates. Consulting a professional realtor for a comparative market analysis (CMA) is recommended to assess your home's value more accurately.

Why are my Zillow views dropping? ›

The views and saves counter will only show the values from the most recent 30 days. You may notice your views and saves counter fluctuate once these 30 days are past, as you are no longer seeing the values from days outside of the current 30-day window.

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