Shares of online real estate listing companies tumbled on Monday after Alphabet’s Google was found testing a new format that places homes-for-sale ads directly at the top of search results, threatening to encroach on a core source of traffic and leads for property portals.
Zillow Group led the declines, with shares down 10.8% in morning trade.
The drop put the stock on course for its steepest fall since March 2024 and its lowest close since late May 2025, according to Dow Jones Market Data.
Other real estate platforms also sold off sharply.
CoStar Group, which owns Homes.com, slid about 7.8% and was on track for its lowest close since July 2022.
Rocket Companies, which bought real estate brokerage Redfin earlier this year, fell 4.7%, heading for its weakest close since November.
Why Google test rattled real estate portals
The selloff followed reports that Google is displaying home listings directly within search results, rather than directing users to third-party portals.
Real estate strategist Mike DelPrete highlighted the development on his blog on Friday, with the findings spreading widely on social media over the weekend.
Source: Mike DelPrete’s blog
“Google putting for-sale listings directly into search results — even if it’s a test — is a big deal,” DelPrete said.
He noted that the feature includes property detail pages, options to request tours and links to contact agents — functions that sit at the heart of the business model for real estate portals.
DelPrete added that the test appears limited, running only on mobile devices and in a small number of markets.
How the feature works
Barron’s replicated the results on a mobile browser, showing that searches such as “homes for sale in Austin” produced a carousel at the top of the page with property photos, prices, addresses and details including bedrooms, bathrooms and square footage.
The feature was not visible in all locations or to all users.
Searches for other cities, such as Boise, did not show the listings, underscoring the experimental nature of the rollout.
Clicking on a listing brings users to a page with more detailed information and options to request a tour or contact an agent.
The page states that Google selects a top-rated local agent who typically responds within a few hours.
Analysts debate likely impact on Zillow
The ad format is built in partnership with real estate analytics and brokerage firm ComeHome, which sources listings from the Multiple Listing Service rather than directly from agents.
That approach positions the product as a potential rival to Zillow’s Premier Agent programme, which generates revenue by connecting homebuyers with agents.
“The test is a negative for Zillow and builds upon other headwinds weighing on the shares,” Gorden Haskett analyst Robert Mollins wrote in a note.
He added, however, that the firm remained a buyer of the stock, arguing the test was unlikely to have an immediate impact on Zillow’s dominant market share or its ability to drive mid-teens revenue growth and margin expansion in 2026.
Goldman Sachs maintained its Neutral rating and $78 price target on Zillow, pointing to longer-term risks from Google’s move but downplaying near-term effects.
The bank said most of Zillow’s traffic comes directly through its own websites, such as Zillow.com and StreetEasy, as well as its mobile apps, rather than via Google search.
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