Zillow Offers (iBuying)
Zillow's algorithm overpaid for 65% of homes it bought. Lost $881M in Q3 2021 and shut down iBuying entirely.
2018 → 2021
$0 (Zillow division)
Real Estate/iBuying
USA
IdeaProof AI Failure Score
Full Analysis
Zillow Offers was Zillow's iBuying division, launched in 2018. The Zestimate algorithm was supposed to accurately price homes for instant purchase. In reality, Zillow overpaid for 65% of homes it bought, accumulating $3.8B in inventory. In Q3 2021, Zillow lost $881M on iBuying and abruptly shut down the division, laying off 25% of staff and selling 7,000 homes at a loss. The lesson: real estate is too complex for algorithmic pricing at scale.
Could This Failure Have Been Prevented?
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