Velocitydrift

CEO Andy Florance said Homes.com has the winning short- and long-term strategy after revealing that the company kept adding paid members in 2025.

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CoStar has created the winning formula for dominating the residential real estate market by attracting renters to its platforms, maintaining a robust list of for-sale listings and offering buyer leads to listing agents — in contrast to its top competitors in the space.

That’s according to CoStar CEO Andy Florance, whose company owns Homes.com and who is defending the portal amid questions from investors over whether there is space for a fourth major real estate portal in the U.S.

Florance addressed investors on a call late Tuesday, shortly after the company shared an earnings report. It was Florance’s latest chance to address questions from investors and to make the case that Homes.com was on a strong path forward.

“Competing U.S. real estate portals suffer from a lack of profitability and low growth not because there’s MLS in the U.S., but because they have chosen an inferior business model,” Florance said. “In contrast to Homes.com, our U.S. competitors’ primary business model is to sell lower-value buyer agency leads to a much smaller audience, rather than marketing the valuable homes.”

“Selling buyer agency leads became their primary business model when their…iBuying business models failed spectacularly,” he said.

The comments echo Florance’s previous defense of his strategy against recent attacks from prominent investors, and in his call Tuesday he continued to position his platform as a worthy competitor.

CoStar has vowed to cut spending on Homes.com by over $300 million this year, a more than 35 percent drop compared to its spending on the brand in 2025. It will keep cutting through 2029 by $100 million per year.

CoStar has suggested that it is exiting a period in which it was investing heavily into Homes.com to create a brand that will last, and generate profit in the future.

CoStar reported attracting 108 million average monthly unique visitors to the 17 brands within its Homes.com Network in 2025. It didn’t immediately report a figure for the fourth quarter, though past reports indicate that traffic was down compared to a year earlier.

Based on previously reported numbers, it appears the network generated about 102 million average monthly unique visitors in the fourth quarter. That would be down about 7.3 percent compared to the fourth quarter of 2024, when the company reported attracting 110 million average monthly unique visitors.

CoStar didn’t immediately respond to a request for comment about traffic in the fourth quarter.

Across its residential real estate portfolio, which includes the Homes.com portal and the company’s rental segments, CoStar reported earning $1.46 billion in all of 2025, up nearly 20 percent from a year earlier.

The company reported having 31,000 agent subscribers, with 76 percent of those being on annual contracts. CoStar reported having 26,000 members in the third quarter, indicating it grew subscriber count by 19 percent to end the year.

“Our Your Listing, Your Lead principle and our market the home and win more listings model is now clearly resonating with agents,” Florance told investors on the call.

“Homes.com is the only real estate portal in the United States whose core business model is to use the power of the internet to help real estate agents market their listings to potential homebuyers,” he added.

In Florance’s comments and in materials released to investors late Tuesday, CoStar made the case that Homes.com is following a similar trajectory to Apartments.com, and that the total addressable market for residential real estate is magnitudes larger than rentals.

“Apartment real estate in the U.S. is worth $6 trillion while single-family homes and condos are worth almost 10 times as much at $56 trillion,” Florance said. “In that context, it’s a very credible belief that Homes.com can generate $5 billion in revenue within the next decade or so.”

“Apartments.com needs Homes.com in order to bring those considering buying into the top of the rental funnel on one of our platforms,” Florance said.

Email Taylor Anderson

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