Acquisition of Realtor.com ‘would be a big inroad for CoStar’
CoStar has been gaining ground in residential real estate, and industry observers say this latest move would “radically accelerate” the company's growth plans.
- News Corp. confirmed that it is in talks with CoStar Group about a potential sale of Move, parent company of Realtor.com.
- The move suggests an interest in competing more directly with Zillow, the leading real estate portal.
- CoStar has acquired a number of real estate companies in recent years, expanding its reach in both the rentals and for-sale space.
CoStar Group's interest in acquiring Move — the owner of Realtor.com — is hardly a surprise to industry observers, who say that founder and CEO Andy Florance has made it clear that he wants to expand further into residential real estate after growing companies in the commercial sector.
News Corp. confirmed Wednesday that it is in talks with CoStar Group about a potential sale of Move, which the Rupert Murdoch news company has owned since 2014.
"CoStar has been making waves for a while to move into the residential side of real estate. Why build [a new company] when it already exists?" said Jay Thompson, an industry observer and veteran agent and broker, about the potential purchase of Realtor.com and its parent company, Move. "The purchase would be a big inroad for CoStar and for Andy Florance." Realtor.com is the second most popular real estate listings website behind Zillow.
Thompson, who spent part of his career at Zillow, believes CoStar's ownership has the potential to give Realtor.com a greater advantage against Zillow, which far outpaces other real estate portals, including Realtor.com, in consumer traffic.
"Zillow owns the residential real estate space. But CoStar has made it clear it wants to come after Zillow," Thompson said. "Realtor.com could use a refresh. And CoStar has money and resources, and is not afraid to put it into their products."
Stefan Swanepoel, longtime industry leader and founder of T3 Sixty as well as Real Estate News, said CoStar would be "very competitive to Zillow," as opposed to Move's current ownership, a diverse holding company. It would be "a very focused real estate data competitor."
Russ Cofano, CEO of Collabra Technology and former SVP at Move, said that a CoStar acquisition would "radically accelerate" the company's plans to expand and grow in residential real estate. CoStar bought Homes.com in 2021. It also owns Apartments.com, Apartment Finder and Rents.com, among other web-based real estate companies.
"CoStar clearly wants a consumer brand to build out their residential platform," Cofano said. An acquisition would provide the MLS data connections and a well-established consumer brand to achieve that, he said.
CoStar Group already has a sizable presence in commercial real estate. The company, which Florance launched 35 years ago, provides information, analytics and marketplaces for transactions in commercial real estate.
"Consolidation in the residential real estate industry is resulting in mega enterprises with scale that will significantly alter the way homes are bought and sold," Swanepoel said. "Invigorating, competitive and times filled with huge opportunity."