CoStar’s Failed Move, Inc. Deal Could Propel Resi Products

UPDATED, March 2, 6:00 p.m.: News of CoStar’s discussions to buy Move, Inc. from NewsCorp sent shock waves through the industry.

Had the deal gone through, it would have made CoStar a serious challenger to Zillow’s domination in the residential listing market. But the failure of those talks will have repercussions of their own.

After nearly three decades focused mostly on industrial, office and retail property data, CoStar’s path to cracking the residential real estate business has been billions of dollars and eight years in the making.

It started with a $585 million purchase in 2014 of Apartments.com, after which the company snapped up Apartment Finder, Westside Rentals and ForRent.com. But the company took its first major steps into residential data with its $250 million acquisition of Homesnap in 2020 and its $156 million purchase of Homes.com in 2021, pushing its total investments in the sector north of $2 billion.

CoStar’s proposed purchase of Move, Inc. valued the platform at $3 billion. With that up in smoke, the commercial real estate giant has money to throw around elsewhere — and has already promised increased investment in at least one of the residential products it has amassed in recent years.

In the wake of the squashed talks, CEO Andy Florance said during the company’s recent earnings call the company plans on turning its attention to Homes.com.

“Traffic to our Homes.com network has passed 20 million unique monthly visitors and has doubled in the last few months,” Florence said, adding the company planned to “be in a position to begin monetizing Homes.com in the later part of this year.”

Florance said 1 million agents — a third more than last year — are now part of the site, which CoStar relaunched last year as an integration with its HomeSnap search platforms.

“Given the strong momentum of Homes.com, we plan to increase our residential investments in the year ahead,” the chief executive said.

HomeSnap is the parent platform of Citysnap, the site CoStar launched last year to face off with Zillow-owned StreetEasy over New York City residential listings.

The site, which partnered with REBNY to become the city’s first MLS, hoped to win brokers over by making it available for free and by not selling listing leads.

For years, StreetEasy was New York City’s de facto MLS as in-fighting and industry rivalries kept the city’s brokerages from launching one. StreetEasy circumvented them by creating a consumer-facing, easy-to-use website. By prioritizing the consumer and making it easy to search properties by neighborhood and a variety of filters, the site won over the general public, forcing brokers and brokerages to follow.

Zillow bought the platform in 2013 for $50 million and went on to anger some brokers with its monetization strategy, which requires payment for rental listings and a percentage of the sales that originated from StreetEasy leads. Brokers also can pay to advertise on someone else’s listing.

Eight months after its launch, rival Citysnap doesn’t seem ready yet to give StreetEasy a run for its money. A recent count found Citysnap had roughly 12,000 for-sale and rental listings across Manhattan, Brooklyn, Queens and the Bronx, about half as many as StreetEasy.

Correction: This article has been updated to reflect StreetEasy allows brokers to pay to advertise on someone else’s StreetEasy listing, not appear as the listing broker.