Zillow says the gap between man and machine is narrowing in the quest to predict home values, but its Zestimates are still off by an average of nearly $40,000 for a house sold in Seattle today. Now a $1 million prize is being dangled to whoever invents a better housetrap.
If you have a house or you’ve looked for one, you’ve probably checked its Zestimate — Zillow’s best guess as what a house is worth today.
The number might help you determine whether you should sell your house, or if the home you’re trying to buy is a rip-off or a bargain. Or you might just use it to gawk at what your friend or neighbor’s home is worth.
But how accurate is that number?
Long a source of complaints from real estate agents, Zillow’s online valuations are far from perfect, the company acknowledges: For instance, according to its own data, the Zestimate on the typical single-family house sold in Seattle today is off by an average of nearly $40,000.
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More than 200 teams have started working on new home value algorithms in the 48 hours since the Seattle-based company launched a new contest to improve its Zestimates model — with a top prize of $1 million.
To win, teams will use Zillow data to create an algorithm that better predicts sales prices for about 110 million U.S. homes listed on the site. Each team’s members and their scores are publicly available on the Kaggle platform, which is hosting the contest: The leading teams’s models have improved slightly just from making tweaks over a 24-hour period, but still lag behind Zillow’s predictions.
One hundred finalists will be picked next January, and the winners will be awarded in January 2019.
Zillow says its Zestimates have improved significantly since launching 11 years ago and now have a median error rate of 5.6 percent. So half of homes end up selling within 5 to 6 percent of what the Zestimate said it was worth.