via zillow.com

Zillow’s trademark “Zestimate” feature, which lets homeowners and prospective buyers see the estimated value of almost any residence, has been upgraded to incorporate artificial intelligence and machine learning capabilities that the company says will improve accuracy.

According to a June 26 post on Zillow’s blog, the Zestimate algorithm can now effectively “see” a home’s exterior and interior features by digitally analyzing photos. This analysis will impact a home’s value estimate in tandem with data that Zillow already collects from public records or listing details, such as square footage or previously assessed value. Whether through automatic image analysis or manual input from homeowners, the new Zestimate is supposed to more accurately reflect the value added to homes through renovations, the company said.

“We heard from homeowners over the years that when it comes time to sell, they want to make sure all the work they’ve put toward upgrading it is reflected in its Zestimate,” according to the blog post announcing the changes. “Yet before recent advances in technology, there was no way for computers to look at photos of a home and get the same information that people do. The Zestimate now incorporates advanced technologies that make this possible.”

Zillow first announced it was adding AI capabilities to its Zestimate algorithm last year, but only on a limited scale. At the time, Zillow said these changes had made its home value estimates about 15 percent more accurate, with an error rate of around 4 percent. Zillow now says the algorithm boasts an error rate of just 2 percent on homes listed for sale, meaning the home’s eventual sales price is only 2 percent above or below its computer-generated estimate, on average.

Despite these touted improvements, the Zestimate feature remains controversial. Most notably, it was the subject of a lawsuit filed against Zillow in 2017 by a group of Illinois homeowners and developers who claimed the digital estimates were making it harder to sell their homes for a profit. The case made it as far as the Federal Court of Appeals before being dismissed earlier this year. Zillow still contends that its value estimates are not intended to replace professional home appraisals.