Zillow has gone wild — for AI

This won’t It’s going to be a great year for real estate app Zillow. “We describe the local market as bouncing along the bottom,” CEO Jeremy Waxman said in our conversation this week. Last year was bleak for the real estate market, and things are expected to improve only marginally in 2026. (If the historic decline in January home sales is any indication, that’s even overly optimistic.) “The way to think about it is there were 4.1 million existing homes sold last year — the normal market is 5.5 to 6 million,” says Waxman. He was quick to add that Zillow itself is doing better than the real estate industry in general. However, its valuation is a quarter of its highest level in 2021. A few hours after we spoke, Waxman announced that Zillow’s earnings increased last quarter. However, Zillow’s stock price fell nearly 5 percent the next day.

Waxman sees a bright spot in artificial intelligence. Like every other company in the world, generative AI represents both opportunity and risk for Zillow’s business. Waxman much prefers to focus on the upside. “We believe that AI is actually an element, not a threat,” he said on the earnings call. “In the past two years, the LLM revolution has opened all of our eyes to what is possible,” Lee said. Zillow is integrating AI into every aspect of its business, from the way it lists homes to the way agents automate their workflow. Waxman marvels that with Gen AI, you can search for “homes near my kid’s new school, with a fenced yard, for less than $3,000 a month.” On the other hand, his customers may end up making the same queries on chatbots run by OpenAI and Google, and Waxman must figure out how to make their next move jump to Zillow.

In its 20-year history, which Zillow celebrated its anniversary this week, the company has always used artificial intelligence. Waxman, who joined in 2009 and became CEO in 2024, points out that machine learning is the engine behind those “valuations” that measure a home’s value at any given moment. Zestimates became the buzz that helped make the app irresistible, and sites like Zillow Gone Wild — also a TV show on HGTV — have built a business around highlighting the most interesting or unusual listings.

More recently, Zillow has spent billions aggressively pursuing new technology. One ongoing effort is to raise the profile of homes for sale. A feature called SkyTour uses an AI technique called Gaussian Splatting to turn drone footage into a 3D view of the property. (I love writing the words “Gassian Splatting” and can’t believe an indie band hasn’t adopted it yet.) AI also powers a feature within Zillow’s Showcase component called Virtual Staging, which furnishes homes with furniture that doesn’t actually exist. There’s a troubling ground here: once you give up the veracity of the actual photo, the question arises as to whether you’re actually seeing a trustworthy representation of the property. “It’s important for the buyer and seller to understand the line between virtual staging and photo reality,” says Waxman. “The virtually staged image should be clearly watermarked and exposed.” He says he is confident that licensed professionals will adhere to the rules, but with AI taking over, “we have to evolve those rules,” he says.

Right now, Zillow estimates that only a single-digit percentage of its users take advantage of these weird viewing features. Particularly disappointing is a foray called Zillow Immerse, which runs on the Apple Vision Pro. When it launches in February 2024, Zillow called it “the future of home tours.” Note that he does not claim to be the near future. “This platform has not yet reached widespread prominence with consumers,” Waxman says of Apple’s underperforming innovations. “I think virtual reality and augmented reality are coming.”

Zillow is on firmer ground by using AI to make its workforce more productive. “It helps us do our work better,” says Waxman, who adds that programmers are producing more code, customer support tasks have been automated, and design teams have shortened timelines for implementing new products. As a result, he says, Zillow has been able to keep its headcount “relatively stable.” (Zillow has cut some jobs recently, but Waxman says that included “a group of people who were not performing at the desired level.”)