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The past 18 months have been a trial by fire for Damian Eales, who came to Realtor.com amid a rough patch for the company that included declining traffic and lead volume sparked by pandemic-induced market headwinds.
Amid his journey to set Realtor.com back on track, Eales has faced a number of challenges — an escalating rivalry with CoStar Group and its residential jewel Homes.com, the dismantling of cooperative compensation, two headline-making legal battles, and mounting housing market troubles stemming from sticky mortgage rates and worsening affordability.
Damian Eales
Yet, Eales faces 2025 with great optimism about Realtor.com and its ability to not just survive competitive pressure — but thrive through it.
“[Competition] makes us better,” he told Inman. “It’s been an incredibly complicated landscape in the last 12 months for our customers to navigate, for Realtors to navigate and also for [multiple listing services] who support the industry. We have played an important role in supporting those customers through that transition and as the industry continues to change, Realtor.com will continue to act as the portal that is genuinely buy and for the industry.”
Ahead of his second appearance at Inman Connect New York, Eales spoke with Inman about the rivalry with CoStar, the competitive landscape for portals amid the changes in cooperative compensation and potential changes to Clear Cooperation, and the landmark issue Realtor.com has its eyes on for 2025.
Inman: Let’s start by reflecting on the past year for Realtor.com. A lot of the headlines over the past 12 months have centered on the competition with CoStar and Homes.com. There’s the theft of trade secrets lawsuit and the advertising challenges with the National Advertising Division (NAD), both of which have been centered on dispelling some of the “smoke and mirrors” that Realtor.com believes CoStar is using to deceive agents and consumers. Do you believe the lawsuit and challenges have been time well spent?
Eales: The first thing I’d say is that we love competition. It makes us better. In the competition against CoStar, or probably the more meaningful competition that we have against Zillow, I think that our time has been very well spent competing and not just competing head-on.
You’ve mentioned a couple of specific issues with CoStar that I’m happy to discuss, but also competing in the sense that we do our own thing and I think that it’s given us an opportunity to reflect upon what is our unique position in the industry and how can we differentiate from the likes of CoStar and Zillow.
In terms of those specific issues, like the NAD process, I think that that’s been a particularly fruitful opportunity for us. It’s enabled us to demonstrate that one of our competitors has competed in a way that’s been deceptive and misleading.
Equally, they’ve challenged back with a NAD [complaint] and given us an opportunity to prove that we’re the number one most trusted [portal] for real estate professionals. I think actions have spoken a lot louder than words in this regard, and we’re really pleased with that result.
In terms of the NAD challenges, Realtor.com has come up on the winning side. As far as the theft of trade secrets lawsuit, that’s going to take some time to shake out as you head toward an August 2025 trial date. I know you probably can’t get into the specifics for legal reasons, but again, do you feel that lawsuit has been a good use of Realtor.com’s resources? Has it achieved what the company wants it to?
I think [the NAD challenge and lawsuit] are two separate issues. On the trade secrets lawsuit, you’re right — we’re not going to go into too much detail there except to say that we think competition is good, but it should be ethical. We don’t think employees continuing to access trade secrets whilst in the employment of our competitor is ethical. So of course, we’re going to fight that vigorously and get discovery to properly assess what actually occurred and the impact that has had. I won’t say anything more about that.
In terms of the NAD process, what was at the heart of that was that CoStar was selling an audience to their customers based on a deceptive and misleading claim that those customers would get access to an audience that, in fact, they weren’t getting access to. We made the point that they were aggregating 17 different URLs into a claim that it was the Homes.com audience, and it gave us an opportunity to encourage customers to go to those other 16 URLs that weren’t Homes.com to look for the branding that they had paid for [and] look for the listings that they thought were being promoted and they would not be able to find them on any of those 16 URLs.
I know the battle over traffic will continue, especially as we head into 2025. And speaking of 2025, I’d like to shift the conversation a little bit into what the competitive landscape might look like next year. The industry still is navigating the initial pains of the changes to cooperative compensation, and portals have played an important part in helping agents adjust. In what ways do you think Realtor.com has stepped up for agents over the past few months? And what opportunities are there for Realtor.com to do more?
We have a unique position that we hold in the industry — we are by and for the industry. We were created by the National Association of Realtors almost 30 years ago and that legacy is within our DNA. It’s not a marketing slogan [and] our actions should speak louder than our words. So, I’d say I’m most proud of the work that we have done to genuinely advocate for the industry through our buyer agency campaign.
When one of our competitors was eroding the proposition of buyer agents, we put our head above the parapet and didn’t speak into the industry bubble. We spoke outside of the bubble to the consumers, to lawmakers, to regulators and politicians. We made the case that buyer agents provide an enormously important service to the community, and it is a unique service from a global perspective that ought to be supported by lawmakers and by the community at large.
We’ve been delighted with the response from the industry to that campaign as well insofar as some 30,000 agents and brokers and [multiple listing services] have downloaded the toolkit that we provided to amplify those messages in their own community. That’s probably what we’re most proud of.
I reported on the buyer agency campaign and based on conversations I had with others about it, I’d agree that was a standout part of Realtor.com’s year. Now what about the work there’s still an opportunity to do? My brother and a few others I know are currently in the process of buying and/or selling a home, and they’re incredibly anxious about what may happen next in the housing market.
Our proposition to consumers is to go where the pros are. We are the No. 1 most trusted by real estate professionals, and we try and leverage some of that and apply it to what we say to consumers. There’s a lot of work that we do on our site to communicate what a professional Realtor can provide when both selling and buying a home, and we’ll continue to do that.
Our buyer agent advocacy campaign really shone a light on the 111 reasons why you would employ a buyer agent, and our second iteration of that campaign tried to really build deep on the particular issues that are associated with less represented and disadvantaged communities.
For example, when veterans buy homes there are various provisions they need to be particularly aware of and buyer agents can play an important role in highlighting those during the buying process.
Where we see the next opportunity to focus on is the issue of housing affordability. I suppose we foreshadowed what we intend to be doing next year in terms of housing affordability on election day by running full-page ads that called on future politicians to turn their attention to the crisis of housing affordability that exists in America.
We’re going to do a lot of work in the new year to demonstrate that while we have had a preoccupation with the issue of commissions as it relates to housing affordability, the fundamental issue that impacts affordability in this market is the supply of housing. There is a shortage of some 7.2 million homes in America. If those homes were built, if planning and regulatory approvals were fast-tracked, and if appropriate incentives were given to the new-home construction industry, we would not have the affordability crisis that we have today.
That’s where we’re going to turn our attention to in the new year.
I’m a millennial and our generation, in particular, has struggled to overcome affordability issues and other market headwinds. I think lawmakers on both sides of the aisle agree housing affordability is an issue, but given our current political climate, I imagine it’ll be more difficult to get Republicans and Democrats on the federal, state and local levels to work together on solutions. Given your unique position in the industry, how can Realtor.com help bridge the gap and get some meaningful housing legislation passed?
We’re cautiously optimistic that the solutions are within our reach. To reiterate, I think that the recognition that there is a housing affordability crisis in the United States has bipartisan support. There’s no politician that I’ve spoken to who would deny that this is a real issue — perhaps one of the biggest issues facing communities throughout America — and so we’re we’re cautiously optimistic that bipartisan solutions within reach for us to also solve these issues. But it’s going to take, as you rightly pointed out, a change at all levels of government.
At the federal level that may mean bringing inflation under control and creating access to federal land for new building development. But equally at the local level of government, it’s going to mean addressing the red tape that is putting an enormous burden on new construction.
The average cost of a new home might be somewhere around $400,000 and yet the average cost of compliance for the planning and the development of that home is closer to $90,000. That’s a significant burden on the affordability of those 7.2 million new homes that need to be built.
In addition to affordability, what are some other trends you have your eyes on for 2025? Clear cooperation is the topic of the moment alongside continuing issues related to cooperative compensation. How do those things factor into your strategy for the new year?
Clear Cooperation has received a lot of coverage recently. The evolution of policies is important as we keep up to date with the changing needs of consumers and Realtors. But what I would say is that we should be careful that we don’t throw the baby out with the bathwater. Clear Cooperation and the MLS system in the United States have ensured that buyers and listing agents have not needed to pay to advertise their properties, and on the other side of the transaction, it’s insured the maximum exposure of listing so that sellers can attract more buyers and and attract a higher price. That is a system that other countries are envious of.
I would hate to see a world for real estate listings that’s more akin to television streaming services that exist today. That’s a fragmented world where consumers are regularly frustrated that they have to go to multiple streaming services to find the content that they want, and in fact, it’s fundamentally the most frustrating aspect of watching television today and why most streaming companies are trying to aggregate content not disaggregate it.
But just to fully answer your question though, artificial intelligence, the benefits of that technology and what it can bring to the digital real estate market is what we’re watching very carefully. The digital search for real estate has fundamentally not changed in 20 years, but this new technology presents both new ways to search but also new ways to present a home. So we see it offering significant new consumer and customer benefits in the future.