CEO Andy Florence said Homes.com has a winning strategy in the short and long term after revealing it will continue to add paid members through 2025.
CoStar has created a winning formula to dominate the residential real estate market by attracting renters to its platform, maintaining a robust list of properties for sale, and providing buyer information to listing agents, in contrast to top competitors in the space.
This is according to CoStar CEO Andy Florance. The company owns Homes.com and is defending it amid questions from investors about whether there is space for a fourth major real estate portal in the United States.
Florence addressed investors on a call late Tuesday, shortly after the company released its earnings report. This was Florence’s final opportunity to answer questions from investors and make the case for Homes.com’s continued strong progress.
“Competing U.S. real estate portals suffer from a lack of profitability and low growth not because we have MLSs in the U.S., but because they have chosen inferior business models,” Florance said. “In contrast to Homes.com, the primary business model of its U.S. competitors is not to sell high-value homes, but to sell low-cost buyer agency to a much smaller audience.”
“When their…iBuying business model failed spectacularly, selling buyer agency leads became their primary business model,” he said.
The comments come as Florance has defended the strategy against recent attacks from prominent investors, and on Tuesday’s conference call he continued to position his platform as a worthy competitor.
CoStar has vowed to reduce spending on Homes.com by more than $300 million this year, which is more than a 35% decrease compared to spending on the brand in 2025. The cuts are expected to continue by $100 million a year until 2029.
CoStar has signaled that it is moving away from a period in which it invested heavily in Homes.com to build a brand that will last and be profitable into the future.
CoStar reported that the 17 brands in the Homes.com network will receive an average of 108 million unique visitors per month in 2025. Fourth quarter numbers were not immediately reported, but past reports showed traffic was down compared to a year ago.
Based on previously reported numbers, the network appears to have generated an average of about 102 million unique visitors per month in the fourth quarter. This represents a decrease of approximately 7.3% compared to the fourth quarter of 2024, when the company reported receiving an average of 110 million monthly unique visitors.
CoStar did not immediately respond to a request for comment on fourth-quarter traffic.
Across its residential real estate portfolio, which includes the Homes.com portal and the company’s rental division, CoStar reported full-year 2025 revenue of $1.46 billion, an increase of nearly 20% year over year.
The company reports 31,000 agent subscribers, 76% of whom have annual contracts. CoStar reported 26,000 members in the third quarter, representing a 19% increase in membership through year-end.
“Our ‘your listings, your leads’ principle and ‘market your home, get more listings’ model are clearly resonating with agents,” Florence told investors on a conference call.
“Homes.com is the only real estate portal in the United States, and its core business model is to harness the power of the Internet to help real estate agents market their properties to potential homebuyers,” he added.
In Florence’s comments and a document released to investors late Tuesday, Koster argued that Homes.com is on a similar trajectory to Apartments.com and that the overall addressable market for residential real estate is much larger than rentals.
“Apartment real estate in the United States is worth $6 trillion, but single-family homes and condominiums are worth nearly 10 times that, at $56 trillion,” Florance said. “In that context, the idea that Homes.com could generate $5 billion in revenue within the next decade or so is very believable.”
“Apartments.com needs Homes.com to help drive prospective buyers to the top of the rental funnel on one of our platforms,” Florance said.
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