By Mark Johnson
Co-Founder of CoRecruit, former CEO of JPAR – Real Estate
The founder and creator of this site recently asked me if the news that CoStar was in the works to acquire Move from Rupert Murdoch was a big deal.
My answer was “Yes!”
The rumor on the street is that the possible acquisition price is $3 billion dollars, and that certainly is a big deal. But it may not have a dramatic effect on residential brokerages.
My business acquaintance and friend, Steve Murray, co-founder of REALTrends, said, “I’m not convinced a sale would have a meaningful impact for real estate brokerages. These firms think if they control the information, they’ll control the distribution of buyers and sellers to agents and change the economics to where they’ll be getting a bigger share of the commission dollar. I suppose all those things are possible, but Zillow hasn’t been able to pull it off.”
Rupert Murdoch’s News Corp purchased Move Inc. for nearly $1 billion in 2014, followed by the 2018 acquisition of the Austin-based lead-generation firm OpCity. CoStar has spent more than $2 billion on residential real estate deals over the last decade, beginning in 2014 with Apartments.com and later acquiring Homesnap in 2020 to launch Citysnap. CoStar’s market cap has more than doubled since 2018 to $32 billion, compared to Zillow’s $10 billion.
“To me, it seems a little low. News Corp. bought it almost 10 years ago for roughly $1 billion and it feels to me that it has more than tripled in value over that period of time.”
Spencer Rascoff, co-founder of Zillow, on the proposed acquisition price of Move, Inc.
CoStar’s Market Motivation
You never know the true motivations of sellers and buyers, yet for Move, it could be cashing out at the right time to focus on other aspects of the business. And it seems CoStar might be taking advantage of a strong cash position (and, to be honest) difficult market conditions to make a strategic acquisition at a favorable price.
CoStar understands the business and has a strong track record of adding value. A new owner always brings new ideas and new innovations and that typically drives more competition. And competition always creates more favorable pricing for users. For agents, teams, and brokers this could be really good news.
Across the industry, you are seeing major players acquire tools and technology to serve the consumer and the agent from the contemplation of a home sale or purchase all the way through to closing, funding, and post-sales support. So this will not be the last acquisition we hear about as the big players in the industry want to capture a larger piece of the pie — the sales of the nearly 5 million homes sold each year.
Stay tuned.
Mark is the former CEO of JPAR — Real Estate, the host of “Success Superstars,” a weekly show that highlights the blueprint of agent success, and the co-founder of CoRecruit. He has invested decades in understanding the inner workings of high-performing real estate companies, managers, teams, and their leaders in major markets across the world.
