Real estate tech giant Zillow on Thursday announced what it says is a significant update to its signature online home valuation tool, the Zestimate, saying the technology can now scan photos and use them to help determine a home’s estimated value.
The company described the new, beefed up Zestimate in a statement as a “smarter, more accurate” tool that can now “see” features such as curb appeal, natural lighting and finishes.
Zillow developed the Zestimate’s ability to see those elements — which are easily recognizable to humans but less so to data-oriented machines — by using “neural networks and computer vision.”
“The new Zestimate was inspired by the way the human brain interprets scenes, objects and images,” Stan Humphries, Zillow’s chief analytics officer and creator of the Zestimate, said in a statement. “It’s a big leap forward, because it means the Zestimate can now understand not just a home’s facts and figures, but its quality and curb appeal.”
The Zestimate first launched in 2006 and, thanks to Zillow’s massive online footprint, has since become ubiquitous among consumers and the company’s upwards of over 180 million monthly visitors to its home search wesbites. (In addition to its namesake website Zillow.com, the company Zillow Group also owns and operates Trulia and StreetEasy.)
The Zestimate is visible as a price in dollars that appears prominently near the top of property listing webpages on Zillow.com, and can be seen on 2 million on-market and 97 million off-market homes.
For many homesellers, the Zestimate may serve as the first insight into what a property might be worth, though Zillow executives and spokespersons consistently say it should be the starting point in a conversation with a listing agent on how to set the price of the home.
Zillow said Thursday that the Zestimate’s “error rate is now less than 2 percent, meaning half of all Zestimates fall within 2 percent of the home’s eventual sale price.”
For many years, the Zestimate determined home values by gleaning information from public records. But those records often don’t contain visual information such as whether the property has granite countertops or formica.
The new version of the Zestimate also now incorporates a variety of other information, including “on-market data in real time, such as a home’s list price, listing description, and days on the market.”
“Of course, agents can continue to use the Zestimate as a starting point when discussing the value of a home and marketing strategy with a client,” the company told Inman in an email. “It’s a great tool agents can use to help determine a home’s list price.”
Zillow said Thursday that the new Zestimate incorporates ideas from its $1 million Zillow Prize competition, which pitted data scientists outside the company against one another in an effort to improve the valuation tool.
Improvements to the Zestimate have also been a long-running project at Zillow, and last year the company revealed that the tool became 15 percent more accurate when it began using algorithms to analyze images for “unstructured data” — or things like countertop finishes. However, until now that type of visual analysis, and the resulting improved Zestimates, were limited to test markets.
Thursday’s announcement, on the other hand, represents the wide-scale rollout of the photo-friendly and more data-intensive Zestimate.
The unveiling of a new and improved Zestimate comes amid an ever-increasing interest within the real estate industry in automated valuation models (AVMs), of which Zillow’s is just one.
Earlier this week, hyper-local social network Nextdoor also announced that it would begin providing estimated home valuations to users, relying on HouseCanary’s new service Come Home to power its valuations rather than developing proprietary, in-house software.
Despite the increased competition, however, Zillow has consistently stressed the ongoing importance of the Zestimate. And in April CEO Rich Barton floated the idea of the tool evolving into a piece of the company’s iBuying service, Zillow Offers.
“That’s the psychic goal,” Barton said during an interview. “That’s the ideal. Ideally I would like to have the Zestimate be a live offer for every house in the country.”
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