Think you know the price of your home better than Zillow does? There might be a $1 million prize for those who can use AI prove it.
The Zestimate score was launched in 2006 to help people estimate the price of a home, whether it’s their own and they’re looking to see whether their asset is gaining in value, or whether they’re looking for a new home and want to see if their offer is fair. Prior to the Zestimate becoming available, only appraisers, mortgage lenders, and real estate agents had access to computer-driven valuations of homes, and the score has been a fundamental component of the company’s growth over the last decade
But, according to Zillow, the Zestimate algorithm is in need of an overhaul, and they’re hoping that a team of data scientists and engineers can push their code to a new level of refinement.
That said, the algorithm is already surprisingly expansive and effective—more than 110 million homes across the country are scored with 7.5 million machine learning (ML) models that examine “hundreds of data points on each individual home.” Some of those data points include data from country and tax assessor records, plus facts uploaded directly by homeowners. All of these calculations result in a median absolute percent error of 5 percent, much improved from 14 percent when the algorithm was first put into action back in 2006.
Stan Humphries, creator of the Zestimate home valuation and Zillow Group chief analytics officer, said in a statement, “While that error rate is incredibly low, we know the next round of innovation will come from imaginative solutions involving everything from deep learning to hyperlocal data sets—the type of work perfect for crowdsourcing within a competitive environment.”
When the contest is completed, and the new algorithm deployed, it will be the biggest change in the algorithm since 2011. And perhaps the change can’t come fast enough, considering that Zillow was just sued by a disgruntled homeowner claiming that the Zestimate repeatedly undervalued her home, making it impossible to sell.
Read the source article at RTInsights.com.