As a result, if you weren’t savvy and didn’t put in a considerable amount of footwork, you consistently overpaid on your down payments. Studies reveal that before Zillow’s data democratisation, an investor paid 2%-5% as an ignorance tax. If you were from out of town, you paid an additional 2%. The informed buyer who uses an app like Zillow saves 4.75% on their payments.

The author of Freakonomics, Steven Levitt, examined the selling habits of real estate agents when it came to their own homes and found that they kept their properties on the market around 10 days longer and sold them for roughly 3% higher than those of their clients. This is not a trivial sum. To put things into context, the 5% overpayment is approximately $20,500 to $25,650 for the average American homebuyer. That can get you a brand new Honda Civic or Toyota Corolla, a full kitchen renovation, or the entire down payment for a first-time buyer. Zillow is a revolution in the real estate industry. It is a boon to the buyer, saving American homeowners $750 billion in aggregate since 2010.

When Jeremy Wacksman took the helm as Zillow’s CEO in late 2024, the company had just shuttered its ambitious home-flipping venture, Zillow Offers, after some spectacular miscalculations, leaving it holding properties it had overpaid for. Wall Street was sceptical. Agents were wary. Competitors were circling. Jeremy Wacksman proved the doubters wrong as Zillow made a miraculous comeback with mid-teens revenue growth, which got investors cheering.

In a letter to shareholders, Zillow CEO Jeremy Wacksman and CFO Jeremy Hofmann wrote, “Our consistently strong performance reinforces that Zillow can grow regardless of what the residential real estate market is doing,” proving that Zillow has decoupled itself from the fate of interest rates and will continue to grow irrespective of the number of homebuyers.

Jeremy Wacksman’s vision is transforming Zillow into what he calls a “housing super app,” a one-stop digital ecosystem that touches every step of buying or selling a home.

What exactly is PropTech, anyway?

Before we deep dive into Zillow and its software-realty revolution, let’s look at the industry it operates in. Zillow can be classified as what economists and technologists call PropTech, just short for property technology. The company uses information technology and digital platforms to give you, the consumer, insights into the real estate market, which is traditionally known for its opacity. Think of it as everything that happens when Silicon Valley meets the housing market.

Even though the global real estate market is valued at hundreds of trillions, the technology that services it is in its adolescence, with annual revenues at around $35 to $45 billion and growing at roughly 12%-16% (in places like Bangkok and Manila, that rate is much higher at 19%). Among global giants like China and Europe, the US dominates PropTech, holding 35%-45% (approximately $12 billion to $16 billion) of the global market. The reason for that is companies like Zillow, CoStar, and Procore. America has a unique combination of standardised data (MLS), high transaction volume, and a tech-centric culture that encourages digital adoption.

Zillow doesn’t control the housing market, but it is definitely in charge of the digital front door of the real estate business. It generated a revenue of $2.5 billion in 2025 and has a massive 15%-20% of the American PropTech market share. Over 60% of Americans who use their mobiles to browse real estate do so through Zillow, and in the residential sector, Zillow is the de facto search engine. It’s Google for home buyers. While they only capture a small slice of the commission dollars (via agent fees), they control the flow of customers.

And why is this happening? It’s because of three major technological shifts. For starters, generative AI is no longer about experimental chatbots and is adept at statistical analysis and can accurately predict which homeowners will sell their property. Artificial intelligence (AI) also performs exceptionally well in automated mortgage underwriting (which improves liquidity by reducing underwriting time from weeks to days), and writes listing descriptions tailored to each customer and with better precision than most human agents.

Then there are immersive technologies like virtual tours and 3D walkthroughs, which help you visualise and feel which home is right for you. Finally, sustainability tech has emerged as a serious value driver, especially in Europe, where buildings are increasingly valued based on their energy efficiency and carbon footprint.

What makes PropTech fascinating is that it varies significantly by location. In Southeast Asia, it’s about managing rapid urbanisation through state-level infrastructure; think government platforms that coordinate transit systems with residential development. In Europe, it’s driven by sustainability regulations, with digital twins of buildings used primarily for energy optimisation and compliance.

American PropTech solves a uniquely American problem. Companies like Zillow have figured out how to bring efficiency and transparency to a fragmented market dominated by 1.5 million independent agents and a patchwork of local Multiple Listing Services.

The story of Zillow

Zillow, an idea thought up by Rich Barton and Lloyd Frink, was launched in 2004. What’s interesting is that both these men were former Microsoft employees who launched Expedia in the 1990s. It’s interesting because Expedia was a web portal that freed information from travel agents and ensured that ticketing and hotel prices were transparent. It was a data democratisation company that disrupted travel. All Barton and Frink did was to apply the successful techniques they used in the travel industry to disrupt the real estate industry. The duo were about to revolutionise real estate by making all home values public.

At the time, this was a radical move. Real estate data was locked away behind agent gates, and if you wanted to know what your neighbour’s house sold for or what your own home might be worth, you had to call a real estate agent and hope they’d share that information. Zillow’s “Zestimate” (an algorithmic home valuation tool) changed everything. Suddenly, anyone with an internet connection could get an instant estimate of any property’s value. The industry opposed it, with agents concerned about job security and critics lamenting inaccuracies in price. However, consumers loved it. Within a few years, Zillow had become the most visited real estate website in America, attracting millions of people who were curious about home values, not necessarily looking to buy or sell.

For years, Zillow operated as what insiders call a “media portal.” It made money by selling advertising and leads to real estate agents through its Premier Agent programme. Think of it as the Google of real estate, a place where buyers started their search, but where the actual transaction happened elsewhere, facilitated by traditional agents and lenders.

Then came the iBuying era. Flush with investor confidence and inspired by the success of companies that were “disrupting” traditional industries, Zillow launched Zillow Offers in 2018. The concept was a simple one. We will use data and algorithms to buy homes directly from sellers, make light renovations, and resell them at a profit. You cut the middleman off and inefficiencies of the traditional market, and capture more of the transactional value. It made absolute sense and was a bold move, championed by Barton, who returned as CEO in 2019 to steer the ship through this “Moonshot.”

However, the algorithms miscalculated. The company overpaid for properties just as the market softened. By November 2021, the real estate market had become erratic, COVID-19 had hit, and home price appreciation was behaving unpredictably. Zillow’s algorithms, designed to forecast prices, struggled to keep up with the wild swings of a market influenced by a pandemic, inflation, and supply chain shocks. A simultaneous labour shortage and supply chain crisis meant that Zillow could not renovate and flip homes fast enough. The company discovered a backlog of inventory it could not clear, comprising thousands of homes that were depreciating each passing day. In the third quarter of 2021 alone, the Zillow Offers segment posted a staggering loss of $339.2 million, necessitating a write-down of over $540 million. Zillow Offers shut down, and a quarter of Zillow’s employees paid the price with unemployment. A truly humbling moment for a company that had spent years positioning itself as the smart data-driven disruptor.

Innovation of the Housing Super App

Instead of doubling down on Zillow Offers, caught in a vicious sunk cost fallacy, Zillow shut down the venture. The brilliance of this move became apparent in the years that followed. By exiting the capital-intensive, low-margin business of house flipping, Zillow was able to pivot back to its core strengths of audience, data, and software. This strategic retreat gave birth to the “Housing Super App” strategy, the engine driving Zillow’s success in 2025. So, the whole Super App vision is really about playing the role of the conductor in a real estate orchestra. It’s managing the transaction from start to finish without actually owning any of the assets involved. It integrates buying, selling, renting, and financing into a seamless, all-in-one digital experience. Zillow profits at each stage, avoiding the headaches and risks associated with holding inventory.

Jeremy Wacksman was the one who made this vision a reality. He was the COO right in the thick of that big pivot, and then he stepped up to CEO in August 2024. Under his guidance, this Super App approach has completely revamped Zillow’s financial picture.

The company shifted its focus to “Enhanced Markets,” cities like Phoenix and Atlanta, where it deployed a full suite of integrated services. The results have been spectacular. In these markets, customer transaction share has increased by over 80% since 2022. By early 2025, Zillow had expanded its Enhanced Market footprint to cover 21% of its connections, with a clear path to 35% by year-end and a long-term goal of 75%.

This pivot restored Zillow’s profitability and financial health. In 2024 and 2025, the company maintained gross margins above 75%, a figure characteristic of elite software firms rather than the slim margins of the construction industry. It’s quite impressive how this company managed to make a major comeback. They achieved positive GAAP net income in Q1 2025, and projections indicate they will remain profitable throughout the entire fiscal year. This marks a significant shift from the substantial losses they experienced back in 2021. Their balance sheet? It’s like a fortress now, sitting on $1.6 billion in cash and investments as of early 2025. That level of liquidity allows them to invest in innovation and weather any economic challenges that may arise.

Zillow owes this turnaround to Jeremy Wacksman’s leadership. As a former engineer at Xbox (another Microsoft subsidiary), he was well versed in that sharp, product-focused discipline. And he brought that over to the C-suite. His intellectual curiosity and willingness to admit ignorance when he did not know something were conducive to a team-based problem-solving approach crucial to tackle the crisis at hand. He took this fuzzy idea of a “Super App” and turned it into real, tangible products like Zillow Rentals, Zillow Home Loans, and the agent-facing Zillow Pro. Just look at Rentals now. It grew revenue by 33% year-over-year in Q1 2025, and aims for a $500 million run rate.

Sure, detractors love to bring up the flop of Zillow Offers as some kind of permanent stain, but by 2025, industry folks see it as a “clarifying moment” that actually highlighted the company’s resilience. It eliminated a distracting business model and encouraged everyone to focus on digital integration. The Zillow that emerged from that 2021 situation is leaner, more focused, and much more scalable. They realised their real strength isn’t in owning actual homes, but in owning the digital backbone that makes homeownership happen. That lesson, earned the hard way, is what’s driving all this optimism now. It’s shifting their strategy away from betting on market prices and toward capitalising on the efficiencies they build.

The future of home sales

In 2025, Zillow really dug in this massive technological moat that’s so deep and wide, it’s struggling to seize its market share. They’ve ditched the old-school world of flat 2D photos and scattered data bits, and stepped right into the era of the “Digital Twin.” We are talking about the super immersive, data-packed virtual copy of a home. It’s not just for show, and this tech jump is what makes remote deals possible and sets Zillow miles apart from everyone else.

The star of their tech lineup is “SkyTour,” which they launched in July 2025 just for “Showcase” listings. SkyTour, a breakthrough in computer vision, is powered by this rendering method called “Gaussian Splatting.” Instead of those clunky traditional 3D models with meshes of triangles, it uses millions of “splats,” which are these ellipsoidal bits that nail complex surfaces and lighting with spot-on photorealism. This stuff was once only for fancy movie effects and games, but now it lets you “fly” around a property on your phone, checking out the roof, backyard, and whole neighbourhood like you’re piloting a drone.

The engineering feat behind SkyTour is huge. Scientists like Will Hutchcroft and executives like Steve Anderson, who headed the Zillow crew, figured out how to tweak this heavy-duty process so it runs butter-smooth on regular web browsers and smartphones. It’s basically made high-fidelity spatial data accessible to everyone, and that shifts how people think about house hunting. It gives buyers that “being there” vibe that plain pics can’t touch, cutting down on in-person visits and speeding up decisions. The numbers back it up. Showcase listings with SkyTour pull in 79% more page views, 76% more saves, and 91% more shares than comparable non-Showcase ones. This initiates a positive cycle where sellers are eager to utilise Zillow’s premium marketing tools, generating additional revenue and enhancing the platform.

But killer visuals are just one piece of Zillow’s 2025 tech puzzle. They’ve gone all-in on weaving AI into the money and search sides of things, too. Take the “BuyAbility” tool. They have nailed it in 2025, and it hits right at the biggest worry for today’s homebuyers: Can I afford this? Old mortgage calculators are rigid and often off-base, ignoring how credit scores, debt-to-income ratios, and changing interest rates all mix together. BuyAbility? It’s live and adaptive. It retrieves real-time mortgage rates customised for your location and credit profile, producing a personalised “purchasing power” score that updates daily.

As rates bounce around in the wild 2025 economy, your BuyAbility score updates on the spot. When you’re scrolling the Zillow map, homes get marked as “Within BuyAbility,” so you can ditch the ones that are a financial stretch and zero in on real options. But it doesn’t stop at crunching numbers. It breaks down how boosting your credit or increasing your down payment tweaks your power, turning you into your personal digital money coach. And by baking Zillow Home Loans right in, they snag you when you’re most ready, making the jump from looking to locking in financing seamless.

On top of that, Zillow flipped the search game with Generative AI. They hooked up a ChatGPT plugin and natural language smarts, so you can do full-on conversational searches. No more fiddling with a ton of filters. Just type something like, “Find me a three-bedroom house in Austin with a big backyard under $500k that’s near good schools.” The AI gets the subtleties and serves up tailored results. This technology also enhances the agent tools. Through the “Zillow Pro” suite, AI analyses user habits to provide agents with “smart lists” and recommended actions. If a buyer keeps eyeing a listing or shares it with someone, the AI pings the agent to follow up, cranking up how well leads turn into deals.

What’s next for Zillow?

As Zillow looks toward 2030, its vision extends beyond profits to stewardship of the housing ecosystem. Through its Super App, the company wields technology for social good, exemplified by the Housing Connector partnership. Since 2019, this initiative has housed over 10,000 homeless individuals by linking case managers with flexible landlords, turning Zillow’s database into a lifeline. Plans aim for 30,000 more placements, proving data can solve systemic crises.

By 2030, the Super App may become the “One-Click Home,” integrating title, escrow, and insurance for seamless transactions, targeting 45% EBITDA margins.

The efficiencies of PropTech are saving tens of thousands of dollars for families at a time when housing prices are near inaccessible for most Americans. Zillow is bringing the American Dream, of which owning one’s own home is a major symbol, closer to every family. It will be a steady and slow process, with Wacksman proclaiming, “Affordability conditions are projected to improve… but it should be a gradual recovery and a year of ‘small wins’.”

In triumph, Zillow has overcome its iBuying woes, forging resilient software and partnerships. Spanning from the 2006 server crashes to the AI immersion of 2025, it empowers consumers, emerging as the optimistic, accessible, and enduring cornerstone of the digital infrastructure for the American Dream.

The post Zillow rewrites the American Dream appeared first on International Finance.

The data shows that there is still a shortage of homes in the country. Those who bought homes recently at historically low loan rates are continuing to live in them. The difficulty of affordability for many people, especially first-time homeowners, is perpetuated in part by tight inventory constraints that prevent prices from declining.

As property prices continue to rise year over year, they are not as startling as they were at the beginning of 2022. Experts say, how much further home prices dip in 2023 will likely depend on where mortgage rates go.

Housing market forecast

Housing experts continue to keep a close eye on the economy as the industry moves to the first half of 2023 after being pulled in many different directions by factors like high inflation, high-interest rates, persistent geopolitical uncertainty, and fear of recession.

However, there are some promising trends developing. According to the National Association of Realtors (NAR), the median price of an existing home sold in February decreased by 0.2% to USD 363,000 dollars from the same month last year. This brings to an end a record-breaking run of 131 straight months of year-over-year gains. Despite a 14.5% increase from January to February in total existing-home sales, which ended a 12-month streak of declining sales. According to NAR, these sales were down 22.6% from a year ago.

According to preliminary data from the US Census Bureau and the US Department of Housing and Urban Development (HUD), housing starts increased by 9.8% in February, contributing to the creation of much-needed inventory. According to Freddie Mac, mortgage rates decreased slightly in mid-January and were 6.42% for the week ending February.

Housing inventory outlook

Since the housing crash of 2008, when the construction of new homes plummeted, there has been a problem with low housing inventory. It has not entirely recovered—and won’t in 2023. In contrast to earlier downturns, the housing supply has remained stuck at close to historic lows, supporting demand and maintaining higher home prices.

Inventory has a 2.6-month supply at the current sales pace, which is low by historical standards but up from 1.6 months a year ago, according to NAR. Industry analysts have a pessimistic assessment of when inventory will eventually stabilise based on this and other data.

“I believe that we are likely to see low inventory continue to vex the housing market throughout 2023,” says Rick Sharga, executive vice president of market intelligence at ATTOM Data. And with 70% of homeowners sitting on a mortgage rate of 4% or less, Sharga says we are unlikely to see an inundation of homes soon, the Forbes Advisor reported.

On the other hand, there are some positive signs present in the field of home construction. According to the US Census Bureau and HUD, single-family construction which started in February jumped by 9.8% and building permit applications by 13.8% after five straight months of losses.

The most recent data from NAHB/Wells Fargo Housing Market Index (HMI) on builder outlooks also showed optimism. The HMI index, which measures builder confidence, increased by two points, from 42 to 44. After 12 straight months of declines, this is the third consecutive month-over-month improvement. Experts say, there will need to be more consecutive upticks before seeing a meaningful resurgence in new construction because builder confidence is still low. An index of 50 or above suggests more builders predict excellent conditions ahead.

Experts also stated that the Federal Reserve is making matters worse by consistently raising the federal funds rate. Federal Reserve Chair Jerome Powell answered inquiries regarding the Fed’s strong monetary tightening strategies in its attempts to control inflation during a semi-annual hearing before the Senate Banking Committee.

During a conversation with Senator Raphael Warnock, Jerome Powell noted that boosting the central bank interest rate increases borrowing costs for businesses that build new houses and makes financing and expanding manufacturing for suppliers more expensive. Additionally, he acknowledged that high fixed mortgage rates deter homeowners from selling their homes when they have a low fixed-rate mortgage. These conditions all put further pressure on the inventory, Jerome Powell explained.

“The bottom line is that there really isn’t a likely scenario that leads to inventory levels approaching historically normal numbers in 2023, which means that prospective homebuyers are still going to have to work hard to find something to buy,” says Sharga.

Will the housing market crash?

Due to the continued inventory problem that is keeping home prices elevated, many analysts anticipate that the housing market is more likely to correct itself from the double-digit percentage rises which are seen in home prices over the past several years rather than crash.

“Home prices will be steady in most parts of the country with a minor change in the national median home price,” Sharga said.

However, some experts who follow the housing market predict that some areas may experience an increase in home sales and prices, particularly in places where home values have remained reasonable over the past few years when compared to the median income.

“We are estimating about a 5% drop nationally. Some markets, believe it or not, will probably see prices continue to increase,” Sharga added.

Senator Raphael Warnock agrees, pointing out that there would be increases or decreases in housing prices depending on the region, with cheaper places likely to witness price rises and more costly ones likely to see falls.

According to some analysts, a significant proportion of borrowers have positive equity in their houses, placing today’s homeowners in a considerably stronger position than those who were recovering from the 2008 financial crisis. As a result, there is little chance of a home market crash.

“Homeowner equity is at the highest level it’s been in the past several decades, so homeowners have a lot of value in their home,” Nicole Bachaud, an economist at Zillow, said.

In a housing market crash, you would typically see a 20% to 30% drop in home prices and a decline in home sales—far more than what’s currently happening. Another crash symptom that’s been missing is a jump in foreclosure activity.

“I think we’re more likely to see the market cool, rather than crash,” Sharga said.

Will foreclosures increase in 2023?

Even with the gradual increase in foreclosures that followed the COVID-19 foreclosure moratorium’s expiration in September 2021, they are still below pre-pandemic levels. The Year-End 2022 US Foreclosure Market Report from ATTOM Data shows that the number of foreclosures was 34% lower in 2022 than it was in 2019.

“It seems clear that government and mortgage industry efforts during the pandemic, coupled with a strong economy, have helped prevent millions of unnecessary foreclosures,” said Sharga.

Foreclosures increased by 2% from December to January 2023, up 36% from the previous year. The fact that many homeowners, including those who are having trouble making payments, have seen a significant increase in their property values recently is a significant distinction between the current housing crisis and that of 2008. That means they still have equity in their homes and are not underwater—when they owe more than the house is worth.

Sharga noted that borrowers in foreclosure are leveraging the positive equity in their homes by refinancing their homes or selling for a profit. “It seems likely that this is a trend that will continue in 2023,” Sharga said.

When should I buy a home in 2023?

In any market, purchasing a home is a very personal choice. Homes are typically the biggest single investment that a person will make in their lifetime, therefore it’s important to have a strong financial foundation before making a purchase. Based on your down payment and interest rate, use a mortgage calculator to determine your estimated monthly housing costs.

Neda Navab, president of the US region at Compass, a real estate tech company, said, “Trying to predict what might happen this year is not the best home-buying strategy. “Buyers sitting on the sidelines today in anticipation of lower prices tomorrow may end up disappointed.”
Neda Navab anticipates a slight reduction in home prices in the hotter markets of recent years, but she does not anticipate a widespread, nationwide price decline similar to that which followed the 2008 financial crisis.

Experts advise buying a home based on your wants and budget rather than holding out for substantially lower pricing. It is possible that a house you like in a neighbourhood you like that also meets your budget is the one for you. But, if you make too many compromises to obtain a home, you can experience buyer’s remorse and be forced to sell the property.

Top markets at risk of home price decline in 2023

According to the CoreLogic Market Risk Indicator (MRI), which provides a monthly assessment of the overall health of the nation’s housing markets, Bellingham, Washington, is at extremely high risk (70%-plus chance) of experiencing a decrease in home values over the coming 12 months. Other areas with a very high probability of price drops include Crestview-Fort Walton Beach-Destin, Salem, Merced, and Urban Honolulu in the United States.

A probability score (from 1 to 100) is provided by CoreLogic Market Risk Indicators, a multi-phase regression model, for the likelihood of two scenarios for each metro: a price fall of more than 10% and one of less than 10%. The likelihood of a price cut increases with a score. CoreLogic is a leading global provider of property information, analytics, and data-enabled solutions.

To make homes more accessible, the housing market may require ‘a correction.’ Since the beginning of 2012, the national housing market in the United States has increased annually. All 50 states and the District of Columbia saw an increase in home prices during the second quarters of 2021 and 2022. Buyers continue to raise property prices in today’s housing market, which causes homes to sell quickly. To win bidding wars in the fiercely competitive home market during this pandemic, the United States witnessed overzealous purchasers submit offers before visiting the property and waive contingencies.

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