Zillow dominates the portals, but Homes.com gains ground 

Zillow continues to lap its competitors in the portal race, but other companies are still strapping on their shoes and sprinting forward.

A new report from Similarweb found that the top 10 home search sites account for 98% of the total market share — and nearly half of that belongs to Zillow, which captured 44% of search traffic. Trailing behind but claiming a sizable share were Realtor.com (19% of traffic) and Redfin (15%). 

While Zillow's dominance was clear, there was notable movement among the portals over the past year. The biggest mover? Small but growing Homes.com, whose web traffic grew by 86% year over year. Only two other home search portals saw any gains in traffic: RE/MAX and Compass, who were up a more modest 18% and 7%, respectively. Zillow's traffic was nearly flat, falling by just under 1%.

Homes.com flexing its muscles

So how did Homes.com manage to grow so rapidly while other sites failed to bring in more visitors? During CoStar's earnings call last month, CEO Andy Florance called the user experience on some competing portals "remarkably awful" — a subjective assessment, and perhaps a bold one considering that Homes.com attracts just 3.3% of home search traffic. Still, Florence said CoStar Group, which operates Homes.com, is positioning its portal to be a worthy rival. 

And they may succeed by following the same playbook as CoStar's other brands, like Apartments.com. That could include investing in branding and TV advertising, said Raymond "RJ" Jones, vice president of communications & insights at Similarweb. 

CoStar also "has expertise in real estate data aggregation and distribution on the commercial side, and it is possible that they have yet to fully deploy their capabilities in the residential market," Jones said. "For markets where real-time listings status is critical, there could be ground for Homes.com to gain."

Although its market share remains small, Homes.com has already proven its ability to gain ground. Of the 17 portals analyzed, it was one of just five to increase its share of traffic, adding 1.6 percentage points year over year, which almost doubled its share from a year earlier. Only Zillow saw a bigger gain with a 2 percentage point jump in market share.

Realtor.com lagging behind

While Homes.com moved up from the back of the pack, No. 2 portal Realtor.com lost substantial ground. Its market share fell by nearly 3 percentage points, far more than any other portal, despite marketing efforts including a new ad campaign released in the fall. 

"It's clear from that data that consumers are choosing other experiences instead of Realtor.com," said Jones. "Whatever strategy and tactics it has been using are not working, so a dramatic shift is in order. … If Realtor.com is going to retake ground, it will have to focus on rebuilding ties and trust with agents who in turn will evangelize more with consumers."

In January, CoStar was in talks with News Corp about a potential acquisition of Realtor.com and parent company Move. While CoStar ultimately passed, the prospect of a sale may act as a catalyst for change, said Jones. 

"It would not be surprising to see new things happening at Realtor.com over this year, whether in advertising, or in the user experience for consumers, or in finding new ways to partner with agents and brokers. Finding another buyer will happen when the asset is attractive to the right buyer," Jones noted.

Brokerage portals are small fish, but valuable to brands

Home search sites tied to brokerage brands account for a small share of traffic. RE/MAX and Compass, which both gained traffic in the past year, still claimed just 1.5% and 1.3% of total search traffic. Coldwell Banker, Century 21, Keller Williams and eXp each accounted for less than 1%.  

However, brokerage-owned portals are likely to provide high-intent leads "because the consumer has done quite a bit of work to get to the site, search and then decide to contact an agent," Jones said. 

"It is important for all brokerages to invest in their home search experience on their branded sites — table stakes in fact — because if they don't, they will risk losing or not attracting agents, and possibly clients," he added. 

Can Goliath be defeated?

Zillow is so far ahead of its rivals — and has been for so long — it's unlikely to lose its No. 1 position, even when it has a down year for traffic. In fact, it would take "an unthinkable event," Jones said, such as losing access to for-sale data or being barred from displaying the Zestimate.

Jones said that such a scenario was "extremely unlikely," but noted that unthinkable events do happen, as evidenced by recent banking failures and the financial crisis of 2008. While Zillow doesn't face any immediate threat, Jones said, "the possibilities for bad things to happen exist."