CNN BUSINESS | Zillow’s home-buying debacle shows how hard it is to use AI to value real estate

Zillow took a $304 million inventory write-down in the third quarter, which it blamed on having recently purchased homes for prices that are higher than it thinks it can sell them.

(CNN) – 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 from the company to purchase the property.

The move, touted by a company exec at the time as “an exciting advancement,” was intended to streamline the process for homeowners considering selling to Zillow as part of its home-flipping business. Zillow promoted this option as a way to make it convenient to sell a home while minimizing interactions with others during the pandemic. Just eight months later, however, the company is shutting down that business, Zillow Offers, entirely.  —read more—