Nearly two years ago, scrutiny of Zillow's Zestimate tool was at such a fever pitch that the company offered $1 million to whomever could improve the tool's accuracy. Now, a winning team has been crowned.
Today, Zillow announced the winning team of the Zillow Prize. The winners beat out over 3,800 teams from 91 countries, with a tool that bested the Zestimate benchmark by 13 percent. Zestimate is a tool on Zillow's website that offers users an estimate of a home's value based on a variety of available public data; many homeowners have complained over the years that the tool undervalued their properties.
For the DC area, 66 percent of the 1.8 million homes which have Zestimates were valued within 5 percent of their sale price and 93.8 percent were valued within 20 percent of their sale price, leaving a 3.1 percent margin of error — far better than Zestimate's accuracy in other metro areas.
The winning team, Team ChaNJestimate, is comprised of teammates from the U.S., Morocco and Canada, none of whom have met each other in person. Zillow's data scientists have already begun incorporating elements of the winning algorithm into the Zestimate system, so the tool should be incrementally improving. Zestimate tends to be $10,000 off on the actual sales price of the average home; the new algorithm should narrow the gap by $1,300.
"As a result of these improvements, their work will help push the Zestimate’s current nationwide error rate of 4.5 percent to below 4 percent and result in more precise home valuations, potentially by thousands of dollars, for millions of homeowners," a statement reads.
This article originally published at http://dc.urbanturf.com/articles/blog/zillow-awards-team-to-improve-zestimates-accuracy/14946
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