How is Zillow using AI in real estate?

Zillow is investing heavily in AI to enhance home presentation and boost workforce productivity. AI-powered features include SkyTour, which creates 3D renderings of properties from drone footage, and Virtual Staging, which digitally adds furniture to empty homes. Zillow is also using AI to automate customer support tasks and improve code production.

What is SkyTour by Zillow?

SkyTour is an AI-powered feature by Zillow that creates a 3D rendering of a property using drone footage. This technology, called Gaussian Splatting, allows potential buyers to virtually explore the property. It is intended to enhance the online presentation of homes.

Does virtual staging help homes sell faster?

Not necessarily; in fact, homes with virtual staging may take longer to sell than traditionally staged homes. The Staging Collective has observed that virtually staged homes sometimes linger on the market longer. Therefore, buyers should do their due diligence and assess the property in person.

What should buyers consider regarding virtual staging?

Buyers should be cautious of virtual staging and not rely solely on the digital presentation. Since virtually staged homes may take longer to sell, it's important to see the property in person to assess its true condition. This will help ensure a more informed decision.

AI Real Estate: Zillow's AI Bet - Future or Hype?

Q: How has the stock market reacted to AI in real estate?

The stock market has shown concern about the potential disruption of real estate services by AI. Shares of real estate service companies like CBRE Group Inc. and Jones Lang LaSalle Inc. experienced significant declines, reflecting a broader "AI scare trade" in the market.

Will AI be your new real estate agent? Zillow is betting big on artificial intelligence to transform how we buy and sell homes, but early results are mixed, and the market is reacting with both excitement and fear.

Key Takeaways

Zillow is investing heavily in AI to improve home presentation and workforce productivity.
Features like SkyTour (3D rendering of properties) and Virtual Staging are powered by AI.
Despite AI advancements, virtually staged homes may take longer to sell than traditionally staged homes.
Real estate service stocks have recently declined due to concerns about AI disruption.

Zillow's AI-Driven Vision for Real Estate

Zillow is aggressively pursuing new technology, with AI at the forefront. The company sees AI as "an ingredient rather than a threat" to help protect its position and change how people search for homes. One focus is improving how homes are presented online using AI.

Enhanced Home Presentation

Zillow has introduced features like SkyTour, which uses an AI technology called Gaussian Splatting to create a 3D rendering of a property from drone footage. They've also implemented Virtual Staging within their Showcase component, digitally adding furniture to empty homes. However, this raises concerns about the trustworthiness of these representations.

AI for Workforce Productivity

Zillow is also using AI to boost its own workforce's efficiency. According to Zillow, programmers are producing more code, customer support tasks are being automated, and design teams are shortening product implementation timelines. As a result, Zillow has kept its headcount "relatively flat," despite some recent job cuts that the company says were related to performance issues.

The Reality of Virtual Staging

While Zillow invests in virtual and AI design tools, some data suggests these tools aren't delivering the expected sales boost. The Staging Collective, an organization of leading staging companies, has observed that virtually staged homes often take longer to sell than traditionally staged homes. These homes may linger on the market longer after being virtually staged.

Market Reaction to AI in Real Estate

The potential disruption of real estate services by AI is causing concern in the market. Shares of real estate service companies like CBRE Group Inc. and Jones Lang LaSalle Inc. plunged 12%, while Cushman & Wakefield Ltd. dropped 14%. These declines marked the biggest drop since 2020 for CBRE and Cushman & Wakefield, reflecting a broader "AI scare trade" in the market. Even Amazon Web Services CEO Matt Garman suggested that fears of AI slowing software company growth might be "overblown."

Markets to Watch

This article does not contain specific market data for cities or regions.

What This Means For Buyers & Investors

Be cautious of virtual staging: Homes with virtual staging may take longer to sell, so do your due diligence beyond the digital presentation. Consider seeing the property in person to assess its true condition.
AI disruption creates opportunities: The recent stock declines of real estate service companies like CBRE, Jones Lang LaSalle, and Cushman & Wakefield suggest potential buying opportunities if you believe in their long-term value and ability to adapt to AI.
Consider the source: Understand that AI-powered features like Zillow's SkyTour and Virtual Staging are intended to enhance the presentation of a property. Do not rely solely on these features to make informed decisions.
Stay informed about AI's impact: Monitor how AI is being integrated into real estate and understand both its potential benefits and risks. This includes tracking how AI tools are used by real estate agents and companies.