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2020 was a roller coaster of a year for the real estate market. In the spring, the pandemic brought construction and viewings to a screeching halt. The months that followed saw demand far outpace supply, with prospective homeowners facing stiff competition everywhere from city-adjacent suburbs to remote resort towns. Through it all, the one constant was that millions of us spent our newly abundant free time daydreaming of a new place to live.
As the primary venue for that real estate voyeurism, Zillow racked up record traffic in 2020. Now, the company’s objective in 2021 is to turn those fantasies into tangible transactions—perhaps with help from a new feature that (literally) changes how we see listings. In a recent earnings release, Zillow Group disclosed that its apps and websites saw a total of 9.6 billion visits in 2020, a 19% increase from 2020, not to mention 201 million average monthly unique users in the fourth quarter. While those are the kind of numbers that inspire Saturday Night Live sketches about our love of real estate porn, the company knows that the overwhelming majority of those daydreamers don’t have any serious plans to use the platform to convert.
“We monetize a single-digit percentage of the people that come to visit us right now,” Zillow CEO Rich Barton admitted in a recent CNBC appearance, likening our curious browsing to the top of a marketing funnel. “Our challenge is…to increasingly turn more of that shopping and dreaming traffic into transactions.”
Though the micro- and macroeconomic factors keeping browsers from becoming buyers are beyond Zillow’s control, a new AI-driven imaging tool should at least let daydreamers see themselves in a new home without the need for a physical tour. Unveiled this week, Zillow’s 3D Home app lets anyone turn photos taken with a 360 degree camera into interactive floor plans. With help from machine learning to analyze existing listing data such as square footage and room dimensions, it creates a more immersive virtual tour that showcases a home’s sense of flow and feel without someone having to set foot on the property.
Currently available in 25 markets, with more to be added throughout the year, 3D Home serves as an early example of a more longer-term change to real estate that is inspired by the pandemic. “[3D Home] an example of how Zillow is investing in the tech and services that make it easier to move,” Zillow home trends expert Amanda Pendleton says. “By removing friction; making better connections between buyers, sellers, and real estate agents; and building a seamless transaction, we believe more people will move with Zillow.”
It’s too early to tell how much an enhanced virtual tour may move the needle, and early anecdotes of buyer’s remorse in the wake of last year’s bonanza speak to the continued importance of thoroughly vetting a new home before making an offer. Still, with millions of individuals theoretically open to the idea of a move, it won’t take a massive increase in conversion rate for Zillow to nudge the home-buying process in a new direction.
