Real Estate Technology Sector Navigates Evolving Listing Landscape

NAR Policy Shifts and Zillow's Revenue Reliance

Recent policy adjustments by the National Association of Realtors (NAR) are prompting a reevaluation within the online real estate sector, particularly for Zillow Group (ZG). The proposed NAR settlement, aimed at offering greater flexibility to home sellers, could necessitate a strategic reconsideration of Zillow's business model, which historically relies heavily on monetizing buyer leads and agent services. In 2023, approximately 75% of Zillow's revenue originated from services provided to brokers and agents in the residential market.

While the NAR maintained its Clear Cooperation Policy (CCP), mandating that publicly marketed listings be entered into a Multiple Listing Service (MLS) within one business day, it introduced a new category for "delayed marketing exempt listings" on March 25, 2025. This option allows sellers to temporarily delay public marketing via Internet Data Exchange (IDX) and syndication. However, Zillow has stated it will implement a permanent ban (effective May 2025) on any listing that initially utilizes this delayed marketing option, asserting its commitment to broad market visibility. Conversely, competitor CoStar Group, parent company of Homes.com, has structured its revenue by charging seller agents for enhanced listing placements, thus appearing less susceptible to potential impacts on buyer agents.

Brokerage Consolidation: The Compass-Anywhere Merger

The competitive landscape is further reshaped by significant consolidation among major brokerages. On September 22, 2025, Compass, Inc. (COMP) and Anywhere Real Estate Inc. (HOUS) announced a definitive merger agreement, an all-stock transaction projected to create an entity with an enterprise value of approximately $10 billion. This strategic combination aims to integrate Compass's technology and marketing capabilities with Anywhere's established brands and global reach, forming a platform with an estimated 340,000 real estate professionals globally.

Analysts from Oppenheimer, Chad Larkin and Jason Helfstein, have highlighted that if Zillow experiences a significant reduction in listing access, it could diminish its value to consumers and potentially render its agent products superfluous for the estimated 210,000 agents associated with Compass. The merger is anticipated to close in the second half of 2026, subject to shareholder and regulatory approvals, with Compass CEO Robert Reffkin slated to lead the combined company.

The "Listing War" and Antitrust Scrutiny

The evolving market dynamics have intensified a "listing war" between Zillow and Compass, centering on control over data and market share. Compass has actively pursued a strategy of utilizing private, off-market listings, providing its agents with exclusive access to properties not available on traditional platforms. In response, Zillow announced a policy in April 2025 to ban listings that are publicly marketed but not widely available, specifically those not made accessible to Zillow within 24 hours. This led to Compass filing an antitrust lawsuit against Zillow in June 2025, alleging "anticompetitive tactics" and platform dominance to stifle competition. Despite Zillow's policy, Compass's exclusive listings have reportedly increased, exceeding 9,000 nationwide as of September 2025. Some industry observers suggest that banning Compass listings could result in Zillow losing 15-30% of all listings in certain markets.

Adding another layer of regulatory pressure, Zillow experienced a 4% decline in its stock in October 2025 following a lawsuit filed by the U.S. Federal Trade Commission (FTC) and a coalition of states. The lawsuit alleges an illegal agreement with Redfin in February 2025, impacting competition in the online rental listings market, potentially leading to higher prices and fewer choices for renters. The outcome of this legal action could significantly impact Zillow's rental business and set precedents for its other marketplace operations.

Zillow's Strategic Response Amidst Headwinds

In the face of these competitive and regulatory challenges, Zillow is actively implementing strategies to mitigate impact and pursue growth. The company is committed to its "housing super app" vision, aiming to provide an integrated, end-to-end transaction experience encompassing buying, selling, renting, and financing. Zillow's second-quarter 2025 results demonstrated revenue growth across its residential, rentals, and mortgages segments, alongside increased platform traffic. Initiatives such as Showcase listings and the Enhanced Market strategy have contributed to Residential revenue growth, and the company is also focused on scaling Zillow Home Loans.

Analyst Perspectives and Market Outlook

Analyst sentiment regarding Zillow (ZG) has been mixed but generally constructive. KeyBanc maintained an "Overweight" rating with an $85 price target in March 2025, citing Zillow's broad data access and potential market share gains. Subsequently, in October 2025, Gordon Haskett upgraded Zillow to a "Buy" rating with a $90 price target, while DA Davidson upheld a "Buy" rating with a $95 price target.

Despite the ongoing legal and competitive pressures, Zillow anticipates a "bumpy" but more active real estate market for 2025. The company forecasts modest home value growth of 2.6% to 2.9% between October 2024 and October 2025, with existing home sales projected to increase slightly to an estimated 4.3 million. The evolving regulatory landscape and strategic maneuvering by key players like Compass and CoStar will remain crucial factors to monitor in the broader real estate technology sector.