CoStar Group, the parent company of Homes.com and Apartments.com, among other sites, continued its revenue growth streak in second-quarter 2024.
The company reported revenue of $678 million from April through June, up 12% compared to the same period a year ago. The firm said this marks its 53rd consecutive quarter of double-digit revenue growth.
CoStar’s residential sector was at least partially responsible for the revenue growth as it rose from $12.7 million in Q2 2023 to $26.2 million in Q2 2024. But despite the jump in revenue growth, CoStar Group’s $19 million net income for the second quarter was down from $100.5 million a year ago.
The second quarter also marked the first full quarter of selling Homes.com memberships. Since mid-February, CoStar said it has sold more than $55 million in net new bookings for Homes.com, resulting in 10,200 agents on the platform with 86% having signed on for a 12-month contract. According to CoStar, it took Apartments.com more than two years to reach $55 million in net new bookings.
Company executives attribute some of the success of the Homes.com launch to the site’s cleanliness and ease of use. During the firm’s earnings call on Tuesday night, CoStar CEO Andy Florance noted that feedback from agent focus groups has been positive.
“The overwhelming majority of participants said that Homes.com is the better home search site than competing sites,” Florance said. “Common themes were that the site is clean, it’s beautiful, ad-free, has more information than other sites have, has all the information you need in one spot. And participants like that the listing agent is clearly visible, is not obscured, and a listing agent who knows the most about the property can be readily reached to ask quick and simple questions of.”
Florance also highlighted Homes.com’s user traffic numbers. The Homes.com Network, which consists of 16 different sites, reported 148 million monthly average unique visitors in Q2 2024, according to Google Analytics, up 73% year over year.
While Florance did not call out Move Inc. and Realtor.com by name — competitors that have — he did offer some insight into why CoStar has chosen to use Google Analytics as opposed to other tools like Adobe Analytics, which is used by Realtor.com to monitor traffic.
“We believe that complete site-centric census style tool, like Google Analytics, is more accurate than user-centric panel estimate counts generated by firms such as comScore or SEMRush,” Florance said of how his firm reports site traffic data.
“I believe tools like Google Analytics are like an election result, whereas a tool like SEMRush or comScore is more like an election poll. If I have the election results, I choose to report those rather than the sample poll result. Our leading competitors in the U.S. residential portal space combined and report traffic associated with home sales, home rentals, rural homes, land sales and apartment rentals in their traffic numbers. For that reason, I believe the most accurate and best apples-to-apples comparison is comparing the traffic from our homes network of sites to the reported traffic of these three leading competitors.”
The earnings call also contained no mentions of the lawsuit recently filed by Move against CoStar Group and its employee, James Kaminsky. But Florance did take some shots at what he has termed “lead diversion models” when answering analyst questions about Homes.com’s business model.
“If I am an agent who doesn’t really do normal residential real estate listings, I don’t normally win listings as an agent, and I’ve been buying leads from a lead diversion site like Realtor, those sites are scraping the listing leads off of 100% of the agents and funneling them down to a small group of people that are just trying to work those buyer agency leads,” Florance said.
“We do something very different. We don’t do those sort of mass scrape selling buyer agency leads. We focus on giving agents an advantage in selling their owners’ home. And so, we’re giving them dramatically more exposure for their listings on our site and that helps them win new sale listing leads or exclusive listings. And it also helps them win buyer agency. It helps them win general branding and branding for the firm.”
In light of the commission lawsuits and impending changes to the business, Florance said he is happy to have a company focused on helping agents with listings.
“With all the things going on in the world, with the National Association of Realtors, with the lawsuits, the sale listing generation is a safe harbor in that storm and so agents prefer that,” Florance said.
