To all the agents in the house,
Zillow's iBuying wind down and related struggles (the company's market value fell from $48 billion in February to about $14 billion today) dovetails with CoStar challenging Zillow where it still reigns supreme: Home listings.
In fact, CoStar has positioned itself as the anti-Zillow. As Zillow "premier agents" pay to advertise themselves as prospective buyer's agents, CoStar's oft-repeated, listing agent-friendly motto is: "Your listing, your lead."
Some background.
Washington, D.C.-based CoStar is mostly a commercial real estate data company, in some sense the Zillow of commercial real estate with its public facing LoopNet.com website. Up to now, CoStar's most public-facing product is Apartments.com, which, well, helps you find apartments, often ones featuring landlords who hold multiple properties.
In April, CoStar announced it would acquire listings website Homes.com for $156 million. The deal came six months after CoStar purchased for $250 million Homesnap, which is another listings website that also has a subscription service for real estate agents. Also, the Homes.com purchase provided occasion for CoStar CEO Andy Florance to take a thinly veiled dig at Zillow — something Florance has done repeatedly in public remarks — while stating CoStar is building a pro-agent residential real estate presence.
"Current residential listing sites do not serve the interests of homeowners or their agents as they focus on selling advertisements on top of agent listings and increasingly offer competing brokerage services," Florance said. "Our plan in bringing in Homesnap and Homes.com is to help agents market their listing in support of 'your listing, your lead' — which stands in contrast to most players in the industry."
Then in October, Homesnap announced it will partner with the Real Estate Board of New York for the public-facing website and app Citysnap. Come spring, Citysnap is to directly compete with Zillow-owned StreetEasy for the attention of prospective New York City homebuyers and renters — and their agents.
As CoStar was rolling out its StreeEasy competitor, of course, Zillow was on the verge of announcing a wind down to its iBuying.
Agents, I have questions.
The main one, of course. Do you buy that CoStar is more agent friendly than Zillow? Should the leads go to the listing agent? Is CoStar's implicit claim that they are being more transparent correct?
Some agents love to hate Zillow Premier Agent. But Premier Agent is the only consistently profitable part of Zillow's business. It's how Zillow monetizes its hundreds of millions of monthly web visitors. Why Zillow's market value is $14 billion (fyi, Opendoor's market cap is $9.4 billion) and not zero likely lies in Premier Agent.
Hence my other questions!
Agents, do you use Homesnap Pro? What does this service offer you that publicly available MLS-aggregated data or proprietary data from your brokerage doesn't?
Do you see CoStar monetizing eyeballs onto Homesnap and Homes.com in a way that will be agent friendly?
Please email me all your CoStar thoughts to mblake@housingwire.com. Your anonymity is presumed.
Sincerely,
Matthew Blake
Senior Real Estate Reporter
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