New home valuation model 'sees' unique home features and incorporates greater real-time data.
Zillow announced refinements to its Zestimate® to incorporate real-time data and computer vision to identify and value improvements to individual homes, calling it "the most sophisticated and accurate" home valuation tool.
Since it launched in 2006, Zestimates have helped inform consumers by using facts from public records to estimate a home's value. However, real estate professionals have also observed that Zestimates could be misleading.
"With today's update, it can now, in a sense, 'see' in photographs features that humans would instantly understand, such as curb appeal and natural light," said a press release from Zillow. "The new Zestimate uses neural networks and computer vision to distinguish between high and low-end finishes and to incorporate the value of features like updated bathroom fixtures, fireplaces, and remodeled kitchens. The Zestimate also now uses real-time data from for-sale homes, including list price and how long a home has been on the market."
The new version incorporates ideas from a two-year data science competition that awarded a $1 million prize. Zillow says that for homes listed for sale, the error rate is now less than 2%, meaning half of all Zestimates fall within 2% of the home's eventual sale price. Agents and homeowners can provide photos for the Zestimate to evaluate. Homeowners can claim their home on Zillow to edit, add, or remove photos at any time.
"While the Zestimate can't interpret home features by name, the way a human would, the image recognition model can classify patterns in the pixels of photographs and correlate them to home value," said Zillow's press release. "For example, while the human eye sees tile or granite countertops, the Zestimate identifies two different pixel patterns."
Stan Humphries, Chief Analytics Officer and creator of the Zestimate, says the new version was inspired by the way the human brain interprets information. "It's a big leap forward, because it means the Zestimate can now understand not just a home's facts and figures, but its quality and curb appeal," says Humphries. "By training neural networks using the millions of home photos on Zillow, the Zestimate now values the features people are most proud of – like new granite countertops, a remodeled bathroom, or a meticulously landscaped backyard."
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