Via MarketWatch - Zillow is offering a $1 million award to the “person or team who can most improve the Zestimate algorithm.” The announcement of the contest comes one week after Zillow was slapped with a class-action lawsuit over its proprietary home-price tool.
The algorithm in question is meant to serve as a starting point in helping people estimate the value of a property, according to Zillow. But the class-action complaint, filed by suburban Chicago home builders, argues that home buyers view a Zestimate as if it were a formal appraisal.
Zillow told MarketWatch the contest has been in the works for over a year.
In a news release, Zillow said that “to homeowners, sellers and buyers, the Zestimate home valuation remains an important data point. Combined with other information, like recent home sales, and the guidance of real estate professionals, the Zestimate helps consumers make smarter financial decisions.”
The company claimed that its error rate nationwide was 5%, a level it called “incredibly low,” while acknowledging that the tool could be improved.
“The next round of innovation will come from imaginative solutions involving everything from deep learning to hyperlocal data sets — the type of work perfect for crowdsourcing within a competitive environment,” Zillow’s chief analytics officer, Stan Humphries, said.
Anyone interested in offering a solution has until Oct. 16, 2017, to compete in the qualifying round. The top 100 entries from that round will be invited to participate in the final round, which is slated to begin Feb. 1, 2018, and end Jan. 15, 2019.
Zillow says it publishes Zestimates on more than 110 million homes in the U.S., based on 7.5 million “statistical and machine learning models that examine hundreds of data points on each individual home.” It draws data from multiple listing services, brokerages, tax assessor records, and more.
The attorney behind the Chicago-area class action, Barbara Andersen, previously sued Zillow over what she claimed was a low Zestimate on her own property. She dropped that case when she took on the class action.