Four years ago, Zillow launched a competition to find a team that could help improve the accuracy of its home valuation tool Zestimate. Two years later, the company selected a team and unrolled a new (and purportedly, improved) version of the tool.
Earlier this week, the company announced the release of an even more improved Zestimate.
With the latest updates, the algorithm behind the tool is meant to respond to changes in the market more quickly, reducing the median error rate on home value estimates by almost a full percentage point, to 6.9% nationwide.
Using artificial intelligence "neural networks", a means of machine learning meant to mimic how the human mind works to arrive at a conclusion or prediction, the algorithm will apply more comprehensive historical property data from public records, tax assessments, and sales, along with property-specific information like location and square footage.
Armed with this information, the algorithm is supposed to be able to correlate facts about the property with larger market trends.
"The new architecture we're debuting today represents another significant step forward in our efforts to harness big data to create more certainty for consumers, which leads to better decision," Dr. Stan Humphries, Zestimate creator and Zillow chief analytics officer, said in a statement.
Since February, Zestimate has also become a means to make instant cash offers on roughly 900,000 houses in 23 markets. The upgrade to the tool is supposed to facilitate broadening the use for this new Zillow Offers option.
This article originally published at https://dc.urbanturf.com/articles/blog/a-new-zestimate-debuts/18389.
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