Case study
Zillow Offers
Model risk at business scale
What happened
In November 2021, Zillow announced it would wind down its home-buying business. It said that forecasting home prices was far less predictable than expected, recorded a write-down of about $304 million in the third quarter, and planned to cut about 25% of its workforce.
Why it matters
A forecasting model drove real purchases at scale, so errors became direct losses.
Lessons
- Ask what happens when the model is wrong.
- Scale only as far as your error tolerance allows.
- Set stop conditions early.
Tools for this
Sources
Last reviewed 2026-11-02. “Why it matters” is our reading of the sources.