acm-header
Sign In

Communications of the ACM

ACM TechNews

What Went Wrong With Zillow? A Real Estate Algorithm Derailed Its Big Bet


View as: Print Mobile App Share: Send by email Share on reddit Share on StumbleUpon Share on Hacker News Share on Tweeter Share on Facebook
Single-family homes in Del Mar, CA.

Computer-driven analysis has become mainstream in stock and bond markets, but buying and selling single-family homes has proved a trickier proposition.

Credit: Bing Guan/Bloomberg News

Real estate firm Zillow Group had looked to its digital home-flipping business Zillow Offers to lead its growth in the future, but the company has acknowledged that will not happen because the unit’s underlying algorithm could not reliably predict housing prices.

That failure, the company said, was rooted in the technology's inability to understand the real estate market and predict housing prices, which are shaped by fluctuating factors like aesthetics and regional factors that influence buyers' decisions.

Zillow CEO Richard Barton admitted to shareholders that the algorithm could not accurately predict swings in home prices, and the company is closing Zillow Offers.


From The Wall Street Journal
View Full Article - May Require Paid Subscription

 

Abstracts Copyright © 2021 SmithBucklin, Washington, DC, USA


 

No entries found