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

Suggested citation format

Anonymous. (2021-11-02) Incident Number 149. in McGregor, S. (ed.) Artificial Intelligence Incident Database. Responsible AI Collaborative.

Incident Stats

Incident ID
149
Report Count
3
Incident Date
2021-11-02
Editors
Sean McGregor, Khoa Lam

Tools

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Incident Reports

Zillow to exit its home buying business, cut 25% of staff

Zillow is getting out of the iBuying business and will shut down its Zillow Offers division, resulting in a 25% reduction in its staff.

In its quarterly earnings report on Tuesday, the company said it will see a total write-down of more tha…

Zillow's home-buying debacle shows how hard it is to use AI to value real estate

In February, Zillow appeared so confident in its ability to use artificial intelligence to estimate the value of homes that it announced a new option: for certain homes, its so-called "Zestimate" would also represent an initial cash offer f…

Why Zillow Couldn’t Make Algorithmic House Pricing Work

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…

Variants

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.