By dangling $ 1 million to the global talent pool of data scientists, Zillow has managed to wring out an improved version of its signature (and controversial) home value estimate, the Zestimate.
On January 30, Zillow plans to reveal the winner of “Zillow Prize” and award $ 1 million to the team that made the biggest improvements to the accuracy of the Zestimate. Zillow is also awarding $ 100,000 to the runner-up and $ 50,000 to the third-place contestant.
The contest “helped bring to light new approaches for pushing the [Zestimate’s] margin of error even lower,” according to a Zillow press release.
Want to know what approaches, and how much more accurate? You’ll have to wait.
The Zestimate currently has a national median error rate of 4.5 percent, meaning that half of its estimates are off a home’s selling price by more than 4.5 percent and half are within 4.5 percent, according to Zillow Group. That’s down from 7.9 percent in 2016, according to what Zillow told Inman at that time.
Zillow spokeswoman Emily Heffter said Zillow Group will only reveal that information when it announces the winner (on January 30).
But when Zillow announced the contest two years ago, Stan Humphries, creator of the Zestimate and chief analytics officer at Zillow Group told Inman that he anticipated those new valuation approaches would include using new hyperlocal data, such as seismic ratings, aircraft flight paths, noise data, water quality and toxic waste information.
The winning team scored the largest improvement to the Zestimate’s accuracy among contestants, based on the accuracy of their model compared to a Zestimate model when evaluated against home sales between August and October 2018.
“The winner’s improvements to the Zestimate will not only give people more accurate home valuations and knowledge about one of their biggest life investments, but also show the innovation that’s possible when we crowdsource ideas and put these types of challenges into the hands of data scientists around the world,” Humphries said in a statement.
More than 15,000 individuals registered for the contest and downloaded the competition’s dataset, while nearly 3,800 competitors submitted developed models to participate in the contest’s first round. Of those, 100 qualified for a final round that has now concluded.
The Zestimate has been a relentless source of controversy in the real estate industry ever since its inception, frustrating agents who say they must deal with consumers who place too much faith in the valuations and also serving as the subject of lawsuits.