Zillow Offers $1M Prize for Algorithm Improvement

It wants results closer to real sale prices
By Rob Quinn,  Newser Staff
Posted May 29, 2017 3:47 AM CDT
Zillow Offers $1M Prize for Algorithm Improvement
Town homes stand under construction as a pedestrian walks along the BeltLine in Atlanta.   (AP Photo/David Goldman, File)

Zillow says its "Zestimate" home valuation algorithm needs some work—and it is willing to pay $1 million to whoever can improve it the most. The company has announced the "Zillow Prize" for the person or team who can make the "algorithm that changed the world of real estate" deliver results that are closest to actual sale prices, GeekWire reports. The tool is closely watched by millions of home buyers and sellers, with inaccurate Zestimates creating plenty of friction, though the company says it has now reduced the error rate to the point where half of all its estimates are within 5% of a home's sale price.

Zillow says data scientists trying for the prize can compete in the public qualifying round until next January. After that, the contest will be narrowed to 100 teams, with the grand prize awarded in early 2019. More than 300 teams have already started working on their entries, though none appear to have made much progress in improving the algorithm, which has been delivering estimates off by an average of $40,000 on Seattle homes, reports the Seattle Times. It was off by more than that when Zillow CEO Spencer Rascoff sold his home in the city last year: it went for just over $1 million, 40% under the Zestimate. (More Zillow stories.)

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