Incident 149: Zillow Shut Down Zillow Offers Division Allegedly Due to Predictive Pricing Tool's Insufficient Accuracy

Description: Zillow's AI-powered predictive pricing tool Zestimate was allegedly not able to accurately forecast housing prices three to six months in advance due to rapid market changes, prompting division shutdown and layoff of a few thousand employees.


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Alleged: Zillow Offers developed an AI system deployed by Zillow, which harmed Zillow and Zillow Offers staff.

Incident Stats

Incident ID
Report Count
Incident Date
Sean McGregor, Khoa Lam

GMF Taxonomy Classifications

Taxonomy Details

Known AI Goal

Market Forecasting

Known AI Technology

Regression, Multimodal Learning, Diverse Data

Potential AI Technology

Optical Character Recognition, Clustering

Known AI Technical Failure

Concept Drift

Potential AI Technical Failure

Incomplete Data Attribute Capture, Adversarial Data, Underfitting, Dataset Imbalance

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Zillow's Zestimate of home values has become a go-to reference for US homeowners. But when Zillow tried to use its algorithm to buy and sell homes, it badly misread the market.

The company’s iBuyer (or “instant buyer”) arm, where tech-first…

What happened at Zillow? How a prized real estate site lost at iBuying · 2021

Zillow, the popular online real estate marketplace and daydream fuel throughout the pandemic, is having a tough time. 

The company turned heads earlier this month when it announced it would be shutting down Zillow Offers, the algorithm-fuel…


A "variant" is an incident that shares the same causative factors, produces similar harms, and involves the same intelligent systems as a known AI incident. Rather than index variants as entirely separate incidents, we list variations of incidents under the first similar incident submitted to the database. Unlike other submission types to the incident database, variants are not required to have reporting in evidence external to the Incident Database. Learn more from the research paper.