Zillow uses artificial intelligence to improve its home value estimates

People’s stories It has become the norm to obtain cash offers for homes that are tens of thousands of dollars higher than the asking price.This year, the US housing market inventory hit a record low, and housing prices hit a record low High. Redfin CEO Glenn Kelman recently emphasized this madness tweet It tells the story of a buyer who offered to name their first child after the seller, but was rejected.

As the hot U.S. real estate market began to overheat, Zillow began providing initial cash offers for the purchase of homes based on its price estimates in February.Now Zillow has updated its algorithm The company says that putting these estimates behind the scenes in a way will make them more accurate—and allow Zillow to provide opportunities to buy more homes.

Owners of approximately 900,000 properties are initially eligible for automatic cash discounts to purchase houses. Zillow Chief Analytics Officer Stan Humphries said artificial intelligence Will expand this pool by 30%. A company spokesperson said that Zillow Offers can complete sales in just one week.

Zillow previously used nearly 1,000 algorithm variants derived for the local market to determine the value of a house.Now all prices nationwide will be determined by one person Neural NetworksZillow said that the new algorithm will reduce the price estimation error of off-site homes in nearly 30 areas in the United States by 11.5%. Compared with the previous version of the algorithm, Phoenix has the most error reduction, followed by San Antonio, Tampa and Houston.

Using the new algorithm, Zillow will update its estimate of the value of 104 million properties in 23 U.S. markets more frequently. Around the time the company was founded in 2005, the valuation was updated monthly. Recently, they are updated several times a week; now, some estimates may be updated daily.

Zillow’s home valuation is a hot topic in the local area, especially in the hot real estate market.A kind recent Saturday night live The skit compares surfing Zillow to phone sex, and joked that for people in their 30s, “the pleasure you once had from sex now comes from looking at someone’s house.”

Zillow has developed its home valuation algorithm for 15 years. In 2019, after open competition to improve its estimate, it began to switch to a single neural network, attracting more than 3,000 teams to compete for a $1 million prize. Two-thirds of the finalists in the competition used neural network-based methods, and Zillow said this form of deep learning is more capable of identifying relationships between data used to estimate house valuations.

For example, Humphries said the new method can better understand how the value or valuation of waterfront properties is affected by the size of nearby houses.

“The old method will make it difficult for the county to understand the value of waterfront housing,” he said. “A neural network trained nationwide can obtain information about the value of the waterfront from other parts of the country and apply it to the local geography, even if there are not many such houses in the area.”

The home value estimate is based on many factors about the property, including square footage and location. Some lists also include data extracted from tax assessments and sales records. Since 2016, the company has also used computer vision systems to draw conclusions from photos of house listings.

CEO Rich Barton said that by expanding its home purchase plan, the company hopes to bring the one-click sensitivity of e-commerce to the real estate market. He said: “Ultimately, we hope that most houses in this country will be in that real-time quotation purchase box.”

The company also hopes to take advantage of the so-called “big reorganization” because more and more people want to work from home more frequently, and millennials want to buy a house.

Barton said that billions of people check the Zillow list every year, many of them for dreams or for some voyeurism. For them, Zillow tries to “participate or entertain”, but for people buying and selling houses, Zillow wants to sell more services. In addition to buying houses, Zillow has also added services such as housing loans and housing insurance, and helped complete the custody process.

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