CoStar can’t stop talking about Zillow as Homes.com’s growth soars
“As Homes.com approaches its seventh quarter since launch, it is now the fastest growing revenue product we have ever launched,” CoStar Chief Financial Officer Christian Lown told investors and analysts on Tuesday evening’s third-quarter 2025 earnings call. Apartments.com and CoStar now have more than a billion dollars in revenue, sales grew at a much slower pace than Homes in the first seven quarters. Homes.com has now generated 50% more revenue in the first seven quarters than Apartments.com did in the same period.
As a result of Homes.com’s strong performance, CoStar said it has continued to grow the segment’s sales force. The company said it now has 500 representatives in production and another 150 in pre-production. Lown said Homes.com has added field sales, new home sales specialists and major account representatives.
CoStar doubles its 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 don’t believe future revenue models for successful real estate portals will be based on iBuying or diverting leads to buyer agents.”
Instead, Lown said he and CoStar believe offering showcase products, such as the Homes.com “Boost” product, will be core products for real estate portals going 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 sales. On average, CoStar says homeowners, who are the primary buyers of Boost, pay a one-time fee of $386 to “Boost” their listing. The company adds that of those agents who do purchase Boost for a listing, 25% convert to full Homes.com membership subscribers.
“Our strategy is to increase the share of agents and homeowners who rely on us to raise awareness of their homes for sale,” Lown said. “And these numbers show we are on track to achieve that goal. Our marketing campaign continues to talk about our audience and brand awareness. In August, unsupported awareness was 42% and unsupported intent was 28%. Unsupported awareness is up from about 4% when we started.”
CoStar said it has also started selling enhanced exposure on Homes.com for new homebuilders starting in late August 2025.
“In the month of September alone, we sold $498,000 in net new annualized new home bookings. In total, we have sold $743,000 of annualized properties since August 25,” Lown said.
Shots fired
While CoStar executives opaquely targeted Zillow in their comments about the diversion model, they later took time during their prepared remarks to spotlight Zillow and highlight the numerous lawsuits the company is currently facing.
“Zillow is under siege and facing an unprecedented wave of lawsuits. I’m not sure the market understands the enormity of the risks coming at Zillow from all sides,” Lown said. “These lawsuits are not isolated cases; they collectively target the core of Zillow’s business, exposing alleged antitrust violations, widespread copyright theft, and blatant deception of consumers. With private prosecutors and government regulators on alert about Zillow’s misconduct, I predict even more aggressive legal and regulatory action in the coming months.”
Lown also discussed Zillow’s standards access policy, which prohibits listings from its site that have been publicly marketed for more than 24 hours before entering the MLS.
“Make a Facebook post and don’t post it to Zillow within 24 hours, you’re banned. Pretty aggressive. It seemed like Zillow was targeting Compass. Zillow went ahead and banned Compass listings that were not posted to Zillow within 24 hours,” Lown said.
Lown said he believes Zillow’s actions “prompted Compass to coalesce defensively Everywhere.”
“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 it, as many as more than 300,000 agents. I’m pretty sure Zillow has just picked a fight it can’t win,” Lown said. “Compass will have the core real estate content, and Zillow will need them much more than Compass needs Zillow.”
Money makes the world go round
When it comes to financial results, CoStar Group had a somewhat mixed quarter, with annual revenue up 20% to $834 million, the 58th consecutive quarter of double-digit revenue growth, but a net loss of $31 million, compared to a net profit of $53 million 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, compared to $17.0 million a year ago. The international residential segment generated $34.4 million in revenue, a huge increase from the $10.7 million in revenue a year ago. This increase contributed to the total annual growth of 31.3% for the residential portal segment. Quarter on quarter, the segment recorded a 22.7% increase in sales.
The residential segment includes all its portals including Apartments.com, Homes.com, OpDeMarkt, And Domain.
According to Andy Florance, CEO of CoStar Group, if CoStar Group had been the owner Australian based domain for the entire third quarter, the total residential portfolio for the quarter would be worth $411 million.
As always, CoStar Group highlighted traffic to the Homes.com network, which totaled 560 million visits in the third quarter of 2025, up 7% from the previous quarter. Lown also quoted Comscore datawhich showed quarter-over-quarter unique visitor traffic increased 8.3% for the Homes.com network, 6.5% at Zillow and 0.7% at Realtor.com.
CoStar also highlighted an improvement in the quality and engagement of its visitor traffic, including a 24% bounce rate, which is down 64% year-over-year, and a 93% year-over-year increase in average session length, which stood at four minutes and 29 seconds in the third quarter.
