WF-H8TVUM1 Nov 2021
Zillow shuts down iBuying after algorithms cause $380 million loss
Zillow shut down its Zillow Offers iBuying business after its pricing algorithms, known as Zestimates, consistently overvalued homes. The company purchased thousands of homes at above-market prices and is now selling many at a loss, expecting to lose an estimated $380 million. Zillow attributed the failure to the algorithms' inability to accurately forecast home prices in a volatile market. The company will write off $569 million in home inventory and lay off 25% of its staff.
- Company involved
- Zillow
- AI system involved
- Zestimates
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