Zillow brings artificial intelligence to real estate
Zillow Group (NASDAQ: Z) (NASDAQ: ZG) operates the world’s most popular real estate websites and mobile apps, with its internet properties receiving 2.8 billion visits in the last quarter. And while many investors are likely familiar with the company, it’s easy to overlook the technology that powers its digital platform.
In this Backstage Pass video, which was broadcast September 27, 2021Motley Fool contributor Toby Bordelon explains how Zillow uses artificial intelligence to create a better experience for home buyers and sellers.
Toby Bordelon: But let’s look at Zillow. If you’ve researched a home or even sold a home, you’ve probably used Zillow or a competitor. What are they doing in AI? It’s very interesting. One thing they’re doing, they’re trying to make a smarter search algorithm. The idea of what they’re doing here isn’t just to give you homes that technically match your search parameters. Maybe they want to expand beyond that and serve what you really want a little bit. Basically, they want to give you what you want in response to your search parameters, not just what you say you want, what you actually want. There is a bit of machine learning from artificial intelligence to try to figure out what it is. You put the search engine here. But we think this house that might not fit, you are going to love it, so we want to give it to you. They are trying to improve their search algorithm.
They have something they’re working on called a floor plan generator, where they can take the images people upload and generate an actual floor plan with a house for you. They use this in a virtual reality, send you to create their house tours from the images you see. Pairing that with an AI algorithm, they have the Zestimate. Zestimate, I guess you are all familiar with it, is now in many submarkets a real and legitimate offer to buy the house at this price. If you plan to do this, your AI will generate this number. It has to be really good or you’ll lose a load of money. When they do that, it tells you that they have a lot of confidence in what their algorithm can do. Whether they’re at the level they’re willing to say, we’re going to use this AI that processes our Zestimate to make real money deals for homes.
This is where they are now. Not everywhere, but it is slowly spreading to more and more places. Big business.
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