It has been anything but a summer of love between two of residential real estate’s largest listing platforms.
A lawsuit kicked off the clash between two major players, followed by censure from an ad watchdog and punctuated by a series of barbs thrown by CEOs for a hectic recent week and the biggest blowback yet to Homes.com’s pursuit of the residential platform crown.
Realtor.com filed a lawsuit in the U.S. District Court in California on July 3, alleging a former Move employee stole trade secrets in an attempt to “unlawfully jumpstart the creation of a ‘monetization engine’ for CoStar by driving up website visitor numbers and increasing revenue and profits.”
One week later, nonprofit ad watchdog National Advertising Division, part of BBB National Programs, issued a recommendation that Homes.com discontinue the use of two claims on its website, including that it has reached 156 million monthly unique visitors and “DOUBLE Realtor.com’s traffic.”
Day after the censure, Move CEO Damian Eales told Inman that his company was behind the complaint submitted to the BBB, calling the ads on Homes.com “deceptive and misleading.”
CoStar general counsel Gene Boxer dismissed the strategic import of the employee at the center of the suit, calling him in a statement to Inman a “mid-level manager who writes and edits stories about condos.” He also called the lawsuit a “creative writing exercise” and a “PR stunt.”
“Realtor.com is losing the battle with Homes.com and its attempt to change the story doesn’t change that reality,” Boxer stated. “We look forward to prevailing in court.”
In response to the censure, Boxer told Inman in a statement that “Homes.com has far surpassed Realtor.com, which is now sliding into obscurity.”
“Realtor.com is losing the portal wars, and losing big,” Boxer added.
But Realtor.com has maintained, including in its lawsuit, that independent third-party sources like Comscore, Nielsen, Similar Web or SEM Rush, show it has maintained its silver medal status among residential listing sites, and that Homes.com is last among the top four.
Growing pains
It’s been a rapid climb for CoStar, which claimed one year ago its residential site network, which includes Homes.com, Apartments.com and 15 other pages, hit 84 million average monthly unique visitors in the second quarter. The real estate data giant claimed it had surpassed Realtor.com and Redfin to become the second most-trafficked residential platform after Zillow.
To kick off the year, CoStar announced its intention to of total domination of the sector, touting a $1 billion advertising campaign.
The company claimed in its first quarter earnings its push into residential was paying off: Google Analytics data showed its network of sites exploded to 156 million unique monthly visitors in March, nearly doubling its visitor count from the same period in 2022. Homes.com itself recorded 110 million unique monthly visitors in March, three times that of March 2023.
The horns-locking between CoStar and Move is playing out amid a looming existential crisis for residential real estate players in the wake of the landmark $418 million settlement by the National Association of Realtors.
The settlement included concessions like removing a requirement of listing agents to offer buyer’s agents a commission to list a property on an MLS and required written agreements between the homebuyer and buyer agent prior to a tour.
Industry experts and investors have signaled they expect the settlement to negatively impact Zillow, Realtor.com and Redfin, which all cater to buyer agents, far more than CoStar, which markets itself far more to sellers agents.
Florance himself has not been shy about his belief that CoStar is the best-positioned for the future of the industry, which has been the real debate underpinning much of the public jockeying.
“I think that lead diversion model that Realtor and Zillow use is gonna go away in the next three years,” Florance told Inman in June. “It’s not gonna work because the homeseller doesn’t like it.”
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This article has been updated to clarify the National Advertising Division, a nonprofit independent organization that’s part of BBB National Programs, made the recommendation to CoStar over its advertising claims.