Zillow Has Gone Wild-for AI

"Last year was dismal for the real estate market, and he expects things to improve only marginally in 2026. (If January's historic drop in home sales is indicative, that even is overoptimistic.) "The way to think about it is that there were 4.1 million existing homes sold last year-a normal market is 5.5 to 6 million," Wacksman says. He hastens to add that Zillow itself is doing better than the real estate industry overall."

""We think AI is actually an ingredient rather than a threat," he said on the earnings call. "In the last couple years, the LLM revolution has really opened all of our eyes to what's possible," he tells me. Zillow is integrating AI into every aspect of its business, from the way it showcases houses to having agents automate its workflow."

The home market is characterized as bouncing along the bottom, with last year described as dismal and only marginal improvement expected in 2026. There were 4.1 million existing-home sales last year versus a normal 5.5–6 million. Zillow reports better performance than the overall real estate industry but carries a valuation around one-quarter of its 2021 peak. Recent quarterly earnings increased while the stock fell nearly 5 percent the following day. Generative AI is being integrated across listings, showcasing, and agent workflows and is viewed as an ingredient for growth rather than a threat. Machine learning has powered Zillow's Zestimates for years.

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