CoStar can’t stop talking about Zillow as Homes.com growth surges

“As Homes.com approaches its seventh quarter since launch, it is now the fastest growing revenue product we’ve ever launched,” Christian Lown, CoStar’s chief financial officer, told investors and analysts during Tuesday evening’s third-quarter 2025 earnings call. “Though Apartments.com and CoStar now have more than a billion dollars in revenue, they grew revenue at a much slower pace than Homes has in their first seven quarters. Homes.com has now grown 50% more incremental revenue in its first seven quarters than Apartments.com, in the same time period. 

As a result of Homes.com’s strong performance, CoStar said it has continued to grow the segment’s sales team. The firm said it now has 500 sales representatives in production and another 150 in preproduction. Lown said Homes.com has added field sales, new home sales specialists, and major accounts reps.

CoStar doubles down on revenue model

“We believe the highest and best function of a portal is to market real estate,” Lown said. “And that is the future of the industry. I do not believe that future revenue models for successful real estate portals will be based on either iBuying or lead diversion to buyer agents.” 

Instead, Lown said he and CoStar believe that listing showcase products, like the Homes.com “Boost” product, will be core products for real estate portals moving forward and he said the company is confident in the early performance of its Boost product. 

Since July, CoStar said it has sold 3,300 Boosts to homeowners, resulting in $617,000 in revenue. On average, CoStar says homeowners, who are the primary buyers of Boost, pay $386 on a one-time basis to “Boost” their listing. The company adds that among agents who do buy a Boost for a listing, 25% convert to full Homes.com membership subscribers.

“Our strategy is to grow the share of real estate agents and homeowners relying on us to bring more exposure to their homes for sale,” Lown said. “And these numbers show that we’re on the way to achieving that goal. Our marketing campaign continues to talk about our audience and brand awareness. In August, unaided awareness was 42% and unaided intent was 28%. Unaided awareness is up from about 4% when we started.” 

CoStar said it has also begun selling enhanced exposure on Homes.com for new homebuilders beginning in late August 2025. 

“In the month of September alone, we sold net new annualized bookings for new homes of $498,000. In total, we’ve already sold $743,000 annualized buildings since August 25,” Lown said.

Shots fired

While CoStar executives opaquely took aim at Zillow in its lead diversion model comments, later on during their prepared remarks, they took time to call out Zillow and highlight the numerous lawsuits the firm is currently facing. 

​​“Zillow is under siege, facing an unprecedented wave of lawsuits. I’m not sure that the market grasps the sheer magnitude of risk bearing down on Zillow, from all sides,” Lown said. “These lawsuits are not isolated instances, they collectively target the heart of Zillow’s operations exposing alleged antitrust violations, widespread copyright theft, and blatant consumer deception. With private plaintiffs and government regulators now alert to Zillow’s misconduct, I predict even more aggressive legal and regulatory action in the months ahead.” 

Lown also discussed Zillow’s listing standards access policy, which bans listings from its site that have been publicly marketed for more than 24 hours before being input into the MLS. 

“Do a Facebook post, and don’t put it in Zillow in 24 hours, you’re banned. Pretty aggressive. It appeared that Zillow was targeting Compass. Zillow followed through and banned Compass listings that were not put on Zillow in 24 hours,” Lown said. 

Lown said he believes Zillow’s actions “pushed Compass into defensively merging with Anywhere.”

“Once the Compass-Anywhere merger is complete, the combined company will be by far the largest real estate brokerage in the U.S., with as I understand, as many as 300,000 plus agents. I’m pretty sure that Zillow just picked a fight it cannot win,” Lown said. “Compass will have the most important listing content in real estate, and Zillow will need them a lot more than Compass needs Zillow.”

Money makes the world go ’round

When it comes to financial results, CoStar Group had a bit of a mixed quarter, reporting a 20% annual increase in revenue to $834 million, its 58th consecutive quarter of double-digit revenue growth, but a $31 million net loss, down from a $53 million net income a year ago. 

CoStar’s North American residential segment was responsible for some of that revenue, reporting $20.5 million in revenue for the quarter, up from $17.0 million a year ago. The International residential segment generated $34.4 million in revenue, a massive increase from the $10.7 million in revenue recorded a year ago. This increase contributed to the overall 31.3% annual growth for the residential portal segment. Quarter over quarter, the segment posted a 22.7% revenue increase. 

The residential segment includes all of its portals, including Apartments.com, Homes.com, OnTheMarket, and Domain.

According to CoStar Group CEO Andy Florance, if CoStar Group had owned Australia-based Domain for the entire third quarter, its total residential portal portfolio would be worth $411 million for the quarter.

As always, CoStar Group highlighted visitor traffic to the Homes.com network, which came in at 560 million total visits in Q3 2025, up 7% from the prior quarter. Lown also cited Comscore data, which found that quarter-over-quarter, unique visitor traffic rose 8.3% for the Homes.com network, 6.5% decline at Zillow and a 0.7% decline at Realtor.com. 

CoStar also highlighted an improvement to the quality and engagement of its visitor traffic, including a 24% bounce rate, which is down 64% year-over-year, and a 93% annual increase in average session duration, which came in at four minutes and 29 seconds in Q3.