Zillow said it released a major update for Zestimate, bringing the algorithm’s accuracy to 4.3 percent nationwide, down from 5 percent.
A big reason for the increased accuracy of Zestimate, according to Zillow, is an increasing use of Amazon Web Services. Zillow already leans on AWS to help process millions of images per day, and the company said with this update it “transitioned all its data to the cloud and can now compute the Zestimate in near-real time.” As a result, Zillow said it can now process data three times faster than before, making Zestimate more accurate and allowing its teams to move at a faster pace.
Zillow is working to improve Zestimate internally, and it has also called on data scientists around the world to improve the home valuation tool. The $1 million Zillow Prize, announced in May, marks the first time that anyone outside of Zillow got a look at a portion of the proprietary data that powers the Zestimate.
Zillow said 15,500 individuals have downloaded the competition dataset Zillow. More than 2,500 competitors from 76 countries around the world have submitted an average of 350 entries a day for the contest.
Teams have until Oct. 16 to submit their entries. The top 100 will earn prize money and be invited to participate in the final round, with a shot at the $1 million prize.
Over the years the tool has served as a source of contention among everyone from home sellers expecting to get more, home buyers expecting to pay less, and real estate professionals wishing they weren’t caught in the middle. Zillow co-founder and executive chairman Rich Barton called the Zestimate “very provocative and personal and a little voyeuristic” in a 2016 GeekWire interview discussing how the company came up with the tool.
Zestimate got a legal boost this week, when a U.S. District Court judge in Illinois dismissed a proposed class action lawsuit against Zillow in which the plaintiffs argued that the tool performs appraisals that Zillow isn’t licensed for.
Zillow consistently refers to the Zestimate as just one data point that consumers have access to when considering buying or selling a home — along with information such as recent home sales and guidance from real estate professionals. Zillow explicitly points out that Zestimate does not constitute an appraisal. Launched in 2006, it marked the first time that homeowners gained access to estimated home values — data that was previously only available to real estate agents, appraisers and mortgage lenders.