Location, location, location has long been real estate’s golden rule. Now, the algorithm is giving it a run for its money. The industry is entering one of its toughest stretches in years, forcing companies to rethink how they attract buyers, win listings, and keep costs in check. AI is becoming one more part of that equation.
Losing steam: Real estate remains one of the worst-performing S&P 500 sectors over the past year, rising just over 8% compared with the index’s 25% gain as elevated mortgage payments continue to weigh on demand. Commercial office properties are also still working through a pandemic-era supply overhang. Those challenges were already testing the industry.
- Then, Google’s home listings rollout went live across all 50 states in mobile search last week, letting users browse homes and contact agents without leaving Search.
- The announcement added to the pressure on already struggling real estate stocks, with Zillow and CoStar both down about 50% this year.
Platform Wars Heat Up
Google isn’t the only company trying to change how people buy homes. Rocket Companies, Compass, Zillow, and CoStar Group are all expanding beyond their traditional businesses in an effort to keep buyers on their platforms from the first search to the closing table. Their latest push is bringing AI into more parts of the homebuying process.
- Zillow recently launched “AI Mode,” blending proprietary housing data with floor plans and 3D home captures to deliver more tailored buyer guidance.
- CoStar is expanding its AI footprint with Apartments.com AI, using its rental marketplace and proprietary data to power a more personalized search experience.
Defending the moat: AI isn’t the only way these companies are fighting back. Zillow is expanding into mortgages and rentals, Rocket now touches roughly 1 in 6 US mortgages through its acquisition of Mr. Cooper, and CoStar is betting proprietary data will help defend its business. Zillow also says 80% of its traffic comes directly through its website or app, giving it less reason to rely on Google. In real estate, the journey is becoming just as valuable as the destination.
