This will not be an exceptionally prosperous year for the real estate application Zillow. “We characterize the housing market as languishing at its nadir,” stated CEO Jeremy Wacksman during our recent discussion. The prior year proved bleak for the property sector, and he anticipates only slight amelioration in 2026. (If January’s historic decline in home transactions is any indication, that projection is unduly sanguine.) “To frame this, merely 4.1 million existing residences were sold last year—whereas a typical market sees 5.5 to 6 million,” Wacksman explains. He expeditiously clarifies that Zillow itself is outperforming the broader real estate industry. Nevertheless, its valuation now stands at merely a quarter of its peak in 2021. Mere hours following our conversation, Wacksman revealed an uptick in Zillow’s prior quarter’s profits. Despite this, Zillow’s stock price experienced a decline of almost five percent the subsequent day.
Wacksman does perceive a ray of hope—in artificial intelligence. Like virtually every other enterprise globally, generative AI presents both potential and peril for Zillow’s operations. Wacksman heavily prefers to emphasize the advantages. “We consider AI a fundamental component rather than a menace,” he declared during the earnings call. “Over the last couple of years, the emergence of large language models has truly broadened our perception of capabilities,” he informs me. Zillow is embedding AI across all facets of its business, from the manner in which it displays properties to assisting agents in streamlining their tasks. Wacksman expresses astonishment that generative AI allows one to query for “residences near my child’s new academy, with an enclosed garden, under $3,000 monthly.” On the other hand, his clientele might ultimately pose identical inquiries to conversational agents managed by OpenAI and Google, and Wacksman is tasked with devising a method to transition their subsequent action directly to Zillow.
Throughout its two-decade existence—Zillow marked this milestone recently—the corporation has consistently leveraged AI. Wacksman, who joined in 2009 and assumed the CEO role in 2024, underscores that machine learning serves as the driving force for those “Zestimates” that assess a property’s valuation at any specific juncture. Zestimates became a widespread phenomenon that contributed to the application’s magnetic appeal, and platforms such as Zillow Gone Wild—which also functions as a television program on the HGTV network—have established an enterprise focused on showcasing the most captivating or unconventional properties.
In recent times, Zillow has lavished billions on the vigorous development of novel technologies. A current initiative aims to elevate the display quality of properties for sale. A feature called SkyTour employs an AI-driven technique dubbed Gaussian Splatting to transform aerial drone videography into a three-dimensional portrayal of the premises. (I find typing the phrase “Gassian Splatting” delightful and cannot fathom why an indie ensemble hasn’t yet appropriated it.) AI also powers a feature within Zillow’s Showcase component named Virtual Staging, which furnishes residences with non-existent virtual fixtures. A precarious territory arises here: Once one forsakes the genuineness of an authentic photograph, the query emerges as to whether one is truly viewing a credible depiction of the property. “It’s crucial that both prospective buyer and seller discern the demarcation between Virtual Staging and the reality of a photo,” states Wacksman. “A virtually staged image must be distinctly branded with a watermark and openly revealed.” He expresses assurance that certified practitioners will adhere to regulations, but with AI’s ascendance, “these guidelines must be adapted,” he affirms.
Presently, Zillow calculates that merely a modest, single-digit proportion of its clientele utilizes these uncommon visual enhancements. Especially disheartening is an experimental venture named Zillow Immerse, which operates via the Apple Vision Pro. At its introduction in February 2024, Zillow proclaimed it “the forthcoming era of property visits.” It’s worth observing that it does not purport to represent the immediate future. “That particular system has not yet attained widespread public recognition,” Wacksman remarks concerning Apple’s less-than-stellar innovation. “I am convinced that virtual and augmented reality will materialize.”
Zillow finds itself on firmer footing by employing AI to enhance the efficiency of its internal staff. “It is assisting us in executing our duties more effectively,” says Wacksman, who adds that developers are producing an increased volume of programming scripts, client assistance functions have been streamlined through automation, and design groups have condensed schedules for introducing novel offerings. Consequently, he states, Zillow has been able to maintain its employee numbers at a “comparatively stable” level. (Zillow did recently reduce certain positions, but Wacksman clarifies that this pertained to “a small number of individuals who failed to meet expected performance standards.”)
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