[ad_1]

Despite the initial controversy, Homes.com isn’t letting up on its traffic war with Zillow, Realtor.com and Redfin. The CoStar-owned portal reported late last week that it reached 149 million unique visitors in February, which equals a mind-boggling 567 percent growth in unique visitors compared to February 2023.

Join the movement at Inman Connect Las Vegas, July 30 – Aug. 1! Seize the moment to take charge of the next era in real estate. Through immersive experiences, innovative formats, and an unparalleled lineup of speakers, this gathering becomes more than a conference — it becomes a collaborative force shaping the future of our industry. Secure your tickets now!

Despite the initial controversy, Homes.com isn’t letting up on its traffic war with Zillow, Realtor.com and Redfin. The CoStar-owned portal reported late last week that it reached 149 million unique visitors in February, which equals a mind-boggling 567 percent growth in unique visitors compared to February 2023.

Andy Florance

“The latest traffic data for the Homes.com network is a validation of our unprecedented investment in building the most comprehensive and agent-, seller- and buyer-friendly residential portal on the market,” CoStar Group founder and Chief Executive Officer Andy Florance said in a prepared statement.

Florance said the February traffic boost — which he partially credited to the company’s $1 billion star-studded ad campaign — puts the 25-year-old portal ahead of Realtor.com and Redfin.

According to the latest earnings round, Realtor.com had 66 million average unique monthly visitors and Redfin had 44 million average unique monthly visitors. Meanwhile, Zillow continued to lead with 194 million average unique monthly visitors.

“Our ‘Your Listing, Your Lead’ model, which works for agents rather than against them to preserve their local knowledge and relationships with buyers, is extremely popular and resonating well with brokers across the country,” he said. “We are thrilled to see such a positive response from homebuyers and sellers as well.”

Beyond Homes.com’s traffic boost, CoStar received another notch in its belt on Monday when analysts upgraded CoStar’s outlook after the National Association of Realtors proposed a $418 million settlement for several buyer-broker commission lawsuits, including Sitzer | Burnett.

The settlement, which hasn’t yet been approved, also includes the overturning of the cooperative compensation rule. If the settlement is approved, offers of compensation will no longer be displayed on multiple listing services by mid-July.

BofA Securities analyst Heather Balsky and JMP Securities analyst Nicholas Jones both upgraded their outlook for CoStar, saying NAR’s “settlement and policy changes” could be “beneficial” for CoStar as “listing agents … seek independence from buyer’s agents.”

Balsky upgraded her price target from $97 to $111 per share, while Jones upgraded his price target from $85 to $110 per share.

Since the analyst upgrade, CoStar’s stock (NASDAQ: CSGP) has been on the upswing. The company’s stock closed at $87.87 per share on Thursday, March 14, and broke the $90 mark after NAR’s announcement on Friday. The post-settlement stock boost has continued, with CoStar stocks trading above $94 as of Tuesday.

CoStar stock as of March 19 at 1:31 pm CST.

Meanwhile, Zillow (NASDAQ: Z) and Redfin (NASDAQ: RDFN) stocks tumbled over the past five days by 13.50 percent and 19.74 percent, respectively, with the sharpest drops taking place after the settlement announcement. Realtor.com’s parent company, News Corp, stock has also suffered; however, there’s no indication the drop was due to NAR’s announcement.

Florance has long argued the dismantling of the cooperative compensation rule would slingshot Homes.com past its competitors, whom he decried at Inman Connect New York for “bait and switch business tactics.”

“In the rest of the world, when an agent has a listing, their name is on the listing, their phone number is on the listing, and there’s branding happening,” Florance of his competitors, whom he called “Ziltorfin.”

“Only in the United States is it the portals’ brand goes on the listing rather than the agents’ brand. That’s bizarre.

“If you’re an agent, you may not be catching this, but buyers have been trained to not ever hit ‘contact agent’ because if you do, you need to buy a new cell phone,” he added. “I’ve tried it. I’ve submitted leads on three houses and I received 140 phone calls, emails, texts and voicemails within 24 hours.”

In a Q3 earnings call, Florance said Zillow, Realtor.com and Redfin have leveraged the buyer-broker commission rule to create a system that diverts listing leads to a small group of agents who pay for heightened visibility when consumers traffic those sites.

“Many agents and brokers strongly resent that model,” he said of the idea that an agent can pay to be featured on a listing that doesn’t belong to them. “Now that Homes.com is one of the most heavily trafficked portals, there is a strong and viable alternative for lead generation available to agents that does not require various commission splits.”

Although CoStar may be gearing up for a victory lap, analysts also say Homes.com’s primary competitor, Zillow, has the capital and experience to pivot its business model.

“[Zillow is] likely to also benefit in time,” Stephens & Co. analyst John Campbell said on Friday.

Email Marian McPherson



[ad_2]

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *