CoStar’s November acquisition of Homesnap signalled the commercial real estate giant’s intention to move into the residential market and then its CEO Andy Florance’s punchy interview with Brad Inman a few days later left nobody in any doubt that the publicly traded firm was setting Zillow firmly in its sights. However, during a session of US industry publication inman.com’s Connect conference for realtors yesterday Florance used another interview with Brad Inman to categorically state that CoStar “is not Zillow’s competitor”.
Far from being a white flag, the comment was in fact something of a provocative diss referring to the way that Florance sees CoStar working with agents and Zillow as competing directly against them. Referring to Zillow’s business model as the “Uberization of residential real estate”, the CoStar CEO and Founder used the interview to draw parallels to Zillow CEO Rich Barton’s ex-company Expedia and the way that it rendered many travel agents obsolete as well as to defend his own company’s pricing record which he described as “in-line with inflation for 20 years”.
During the interview Florance also revealed that CoStar would be looking to “strategically acquire companies that will help us grow the business” in the residential sector and that he had been up late the previous night working on an acquisition his company has in the works. A recent report by Bloomberg claimed that CoStar was one of two parties competing for the significant buyout of US housing data company CoreLogic which, were it to go the way of CoStar, would give the company a massive step up in its data game.
Another acquisition which may be significant for CoStar is the company’s recently announced purchase of the domain houses.com which may well become the home for the Washington-based firm’s consumer-facing residential property portal which Florance said would be designed with both agents and home-hunters in mind. Florance reiterated CoStar’s belief, inherent in the company name, that it wants to strengthen the relationship between end-users and agents; a relationship which the company is apparently “not trying to own and monetize”.
With this new portal potentially set to be launched in a year’s time, the competition in the world of American residential real estate marketing may be close to becoming more of a two-horse race. The two companies already own and operate a surprising number of portal domains between them, and the number is not likely to stop growing soon.