Zillow’s CEO, Jeremy Wacksman, acknowledges that the housing market remains sluggish, with 2024 unlikely to see substantial improvement. Despite this broader industry stagnation, Zillow’s performance has outperformed the market overall, though its stock valuation is down 75% from 2021 highs. The company’s response? A full-throttle push into artificial intelligence (AI) across all facets of its business.
AI as Zillow’s New Engine
Wacksman frames AI not as a threat, but as an “ingredient” for growth. The company is integrating generative AI into its core functions, from search capabilities (“homes near my kid’s new school with a fenced-in yard, under $3,000 a month”) to automating workflows for real estate agents. This is not new for Zillow, which has long relied on machine learning—most famously for its “Zestimates” that drive viral engagement and fuel ancillary businesses like the Zillow Gone Wild franchise.
Risky Innovation: SkyTours, Virtual Staging, and VR Headsets
Zillow has spent heavily on advanced tech, including “SkyTour” which uses Gaussian Splatting to render 3D property walkthroughs. It also employs AI-powered virtual staging to furnish vacant homes digitally. While effective, these features raise transparency concerns: Wacksman insists on clear disclaimers for virtual staging, but the potential for misleading representations remains. The rollout of Zillow Immerse for Apple Vision Pro, touted as the “future of home tours,” has underperformed, highlighting the limitations of emerging VR technology.
AI for Internal Efficiency
Beyond customer-facing features, Zillow is using AI to boost internal productivity. Programmers are writing more code, customer support is automated, and design cycles have accelerated—allowing the company to maintain a relatively flat headcount despite recent layoffs.
The Bigger Threat: Chatbots and Google’s Ambitions
Zillow faces an existential challenge: real estate listings are public data. The rise of AI-powered chatbots threatens to bypass Zillow’s app entirely, with users getting direct access to listings via OpenAI or Google. Zillow has integrated with OpenAI, but the activation path to its platform remains inconsistent.
More alarming is Google’s recent experiment in select cities, directly displaying Zillow-style listings alongside agent ads in search results. If successful, this could shift traffic away from Zillow and into Google’s ecosystem. Wacksman dismisses this as a marginal ad grab, but the potential for Google to integrate this data into its AI products (like Gemini) poses a long-term threat. Speculation about a Google acquisition of Zillow has resurfaced.
“When buyers and sellers want a real estate site to use for transactions, they find us,” Wacksman asserts. “Once they want a virtual tour, preapproval, or agent communication, they need our deep, integrated experience.”
Despite the risks, Zillow remains confident that its direct traffic and comprehensive platform will retain users. The company’s bet on AI is not just about innovation; it’s about survival in an increasingly competitive landscape.
