CoStar's Gambit: Remaking Real Estate with Homes.com

ARLINGTON, VA – November 24, 2025 – An award for "Consumer Experience & Marketplace Innovation" from industry publication Inman might seem like a standard corporate accolade. But for Homes.com, the fast-growing residential portal owned by commercial real estate behemoth CoStar Group (NASDAQ: CSGP), the 2025 Best of Proptech award is a public validation of a strategy aimed at nothing less than upending the multi-billion-dollar U.S. residential property market. This recognition is not just about new technology; it signifies a pivotal moment in CoStar's audacious, capital-intensive campaign to challenge established giants and reshape the digital real estate landscape from the ground up.

For investors focused on resilient returns, CoStar's entry into the residential space represents a fascinating case study in strategic disruption. The company is leveraging its deep pockets and a playbook honed over decades in the commercial sector to build a formidable competitor, betting that a fundamentally different business model can chip away at long-held market dominance and create significant long-term value.

A Calculated Disruption

CoStar Group's move into residential real estate was not a tentative step but a full-force invasion. After acquiring Homes.com in 2021, the company embarked on an unprecedented marketing blitz, investing over $1 billion to reintroduce the brand to American consumers. The results have been dramatic. In just one year, consumer brand awareness skyrocketed from a mere 4% to 33%, fueled by a campaign designed to reach over 90% of U.S. households.

This massive spend has translated directly into user engagement. As of the third quarter of 2025, the Homes.com Network reported an average of 115 million monthly unique visitors. Independent web analytics further underscore this momentum, with data from October 2025 showing Homes.com surpassing market leader Zillow in total monthly visits. This rapid ascent has made Homes.com the fastest-growing revenue product in CoStar's history, a significant achievement for a company with a portfolio of market-leading brands like LoopNet and Apartments.com. The company projects revenue growth for Homes.com to be in the high teens to low 20s for 2025, underscoring its role as a key engine for CoStar's future.

This growth is the visible outcome of a deliberate strategy. CoStar is not simply buying market share; it is executing a long-term plan to build a durable moat around its residential business, one founded on a core principle that sets it apart from its primary competitors.

The Agent-Centric Battleground

The true innovation—and the crux of CoStar's strategic bet—lies in Homes.com's "your listing, your lead" business model. Unlike incumbent portals that generate significant revenue by selling buyer leads to "Premier Agents" who may have no connection to the property listing, Homes.com directs all inquiries to the agent who actually holds the listing. This agent-centric philosophy is a direct challenge to the established order.

"Homes.com is redefining how Americans buy and sell homes by restoring trust and transparency to the process," stated Andy Florance, CoStar Group's Founder & Chief Executive Officer, in the announcement of the Inman award. "We set out to build a platform that empowers agents and homeowners alike."

This approach is designed to cultivate loyalty among the real estate professionals who are the lifeblood of the industry. By refusing to monetize leads from one agent's hard-won listing and sell them to another, Homes.com positions itself as a partner rather than a toll collector. The strategy has been sharpened by pointed critiques of competitor practices. Florance has publicly condemned policies from rivals that he argues are designed to protect their ability to profit from agents' work. In a particularly telling move, when Zillow banned certain private listings, Homes.com responded by offering its "Boost" marketing services for free to agents affected by the ban, a clear and tactical maneuver to win converts.

This focus on empowering agents is resonating. The platform now has over 26,000 members, a nearly 150% increase since the third quarter of 2024, with 7,000 agents joining in the third quarter of 2025 alone. CoStar's internal metrics report a demo-to-close rate exceeding 50% and high Net Promoter Scores, suggesting that the value proposition is compelling for a significant segment of the agent community.

Technology as the Tip of the Spear

While the business model is the strategic foundation, technology is the weapon of choice in this portal war. The Inman award specifically recognized Homes.com for its innovation, highlighting several new features designed to create a superior user experience.

Chief among them is the AI-powered Smart Search, launched in October 2025. This tool moves beyond rigid filters, allowing users to type or speak conversational queries like "a four-bedroom house with a big backyard near a good high school in either Austin or Dallas." By interpreting natural language, the platform aims to make the search process more intuitive and less frustrating, delivering personalized results that better match a buyer's true intent. While competitors are also integrating AI, Homes.com's early and robust implementation is a key part of its pitch to consumers.

The platform also offers Homes.com Boost, a digital marketing suite for members. This service elevates listings in search results and runs retargeting ad campaigns across the web and social media. The company claims boosted properties are 25% more likely to go under contract within 10 days, providing agents with tangible data on views and leads to demonstrate value to their seller clients. Furthermore, the platform's recent unveiling of the industry’s largest builder-verified catalog for new construction provides a unique, national-scale tool for a crucial market segment.

The Road Ahead: Growth, Grumbles, and Long-Term Value

CoStar Group has set an ambitious target for Homes.com: $1 billion in annual revenue and the unseating of Zillow as the market leader. The rapid growth in traffic and agent membership provides a strong foundation for this goal. However, the path of a disruptor is rarely smooth.

While many agents praise the agent-centric model, online reviews reveal a more complex picture. Some agents have expressed frustration with the quality of leads generated, difficulties navigating contract cancellations, and perceived inaccuracies in property data. Others have criticized direct mailers sent by Homes.com to sellers, which they felt undermined their marketing efforts. These grumbles highlight the operational challenges of onboarding thousands of new members while refining a complex platform and managing customer expectations.

Nonetheless, these issues appear to be friction inherent in an aggressive growth strategy rather than a fundamental flaw in the model. CoStar is playing a long game, leveraging its financial strength and deep experience in building data-driven marketplaces to methodically build its residential presence. By aligning its success with the success of real estate agents, the company is fostering a base of support that could prove to be a resilient and powerful asset in the protracted battle for dominance in the U.S. online real estate market.