December 15, 2025 — Zillow Group, Inc. (Nasdaq: Z and ZG) stock fell sharply on Monday after reports that Google is testing a new real estate ad and listings experience inside Search, raising fresh fears that the world’s most powerful traffic gatekeeper could become a direct rival to online housing portals. [1]
Zillow’s Class C shares (Z) were down about 10% in the latest trading data, with volume surging far above typical levels—an immediate sign that investors are treating the Google experiment as more than a minor UI tweak.
But the story is more nuanced than “Google enters real estate, Zillow doomed.” Analysts are split: some see a long-term platform threat, while others argue the near-term impact is limited because Zillow’s biggest strength is not SEO traffic—it’s direct consumer usage and its app ecosystem. [2]
Why Zillow stock fell today
Zillow’s Class C shares (Z) traded around $67 on Monday, down roughly 9–10% on the day, after opening lower and touching the mid-$60s. Trading volume spiked to roughly 28 million shares, versus an average daily volume near 5 million, underscoring how quickly the “Google risk” narrative spread through the market.
Market coverage described the move as Zillow’s steepest one-day drop since March 2024, with shares hitting their lowest levels since May 2025 during the selloff. [3]
Importantly, Zillow wasn’t alone. Other housing and real estate-search-related names also slipped as investors repriced the possibility that Google could siphon off top-of-funnel discovery traffic and agent-ad dollars. [4]
What Google is testing—and why it matters to Zillow’s business model
Reports say Google is experimenting with home-for-sale ads appearing at the top of search results—including a photo carousel, prices, addresses and property stats for queries such as “homes for sale in Austin.” Those units link to pages with more detail and ways to contact agents, which starts to overlap with the core “portal” workflow Zillow has spent two decades refining. [5]
Additional reporting and analyst notes suggest:
- The experience appears mobile-centric and not widely rolled out across all markets or users yet. [6]
- Listing content shown in tests has been attributed to third-party provider ComeHome, based on screenshots shared by real estate analyst Mike DelPrete and cited in multiple reports. [7]
- The flow includes consumer actions like requesting tours and contacting agents, which is exactly where Zillow monetizes attention via its agent marketplace (notably Premier Agent and related models). [8]
The investor fear is straightforward: if Google owns the first click, Google can (eventually) own the economics—either by charging for leads, increasing ad auction costs for agents, or reshaping consumer expectations about where “real estate search” begins.
Analyst reactions on Dec. 15: RBC stays bullish, Goldman holds neutral, Piper Sandler sees opportunity
Monday’s Zillow selloff immediately triggered a wave of rapid analyst commentary and recap notes—some focused on the competitive threat, others on why the market may be overreacting.
Goldman Sachs: long-term risk, but limited near-term impact
Goldman Sachs maintained a Neutral rating and a $78 price target, describing Google’s real estate ad format as a potential long-term risk to portals, while also emphasizing that the product appears limited (for now) and that Zillow has meaningful direct traffic and app usage. [9]
RBC Capital: Outperform, $95 target—SEO exposure seen as smaller than headlines imply
RBC reiterated an Outperform rating with a $95 price target, arguing that although the headline looks negative, the fundamental impact could be limited. RBC’s key points included:
- The listing source may run into MLS distribution rules, potentially limiting durability if data access is challenged. [10]
- Zillow’s reliance on SEO is described as relatively small compared with mobile app usage, and RBC suggested the traffic that converts into revenue is less exposed than investors fear. [11]
- RBC also flagged the timing—coming after announcements around AI/assistant “vertical partnerships” that include Zillow—as potentially part of a broader competitive response, not just a random product test. [12]
Piper Sandler (via market reporting): Overweight, $85 target; concerns may be exaggerated
A separate market recap cited Piper Sandler as Overweight with an $85 price target, suggesting the market may be overestimating the immediate threat and noting that search engines have explored MLS-related integrations before, with legal and licensing uncertainty often acting as a constraint. [13]
The “hidden” Zillow risk investors are also watching: MLS relationships and listing access rules
Google’s test is grabbing the headlines—but on the same day, Zillow is also facing industry-level friction around listing data access, which is foundational to any real estate portal’s value proposition.
An Inman report published Dec. 15 said Chicago-area MLS MRED warned members that Zillow had been contacting subscribers about potential “disruptions” to listings flowing to Zillow via MRED starting in early January. The dispute is tied to Zillow’s policy around listings that are marketed but not broadly shared—especially those connected to private listing networks. [14]
This matters for investors because it highlights a structural reality: portals don’t fully “own” their inventory the way an e-commerce site owns product listings. They operate inside a complex ecosystem of MLS rules, broker feeds, licensing terms, and shifting industry politics. If data pipes get pinched in major metros, consumer experience—and monetization—can suffer.
It also connects back to the Google story: if Google’s test is indeed pulling from third parties and MLS-sourced feeds, data rights and distribution rules could become a pressure point for Google as well. [15]
Zillow fundamentals: what the company last reported
When a stock drops double digits on competitive fear, investors usually ask the next question: “Is the business already weak, or is this mostly narrative?”
Zillow’s most recent quarterly report (Q3 2025, reported Oct. 30) showed a company that—at least in the numbers—was executing solidly:
- Revenue rose 16% year over year to $676 million. [16]
- Adjusted EBITDA was $165 million (24% margin), up year over year, supported by revenue strength and cost management. [17]
- Zillow posted GAAP net income of $10 million (a swing from a year-ago loss in the same quarter). [18]
- Traffic across apps and sites averaged 250 million monthly unique users, up 7% year over year. [19]
- Rentals revenue increased 41% year over year, and mortgage revenue grew as purchase origination volume increased. [20]
- The company ended the quarter with $1.4 billion in cash and investments. [21]
Those metrics matter today because they support the bullish counterargument: Zillow’s moat isn’t purely “ranking on Google.” It’s brand-driven demand, a habit-forming app, and an integrated marketplace connecting consumers to agents, rentals, and financing.
Housing market outlook: Zillow expects 2026 to “warm up,” but mortgage rates may stay above 6%
Zillow’s stock ultimately trades on a mix of company execution and housing-cycle gravity. High mortgage rates have been the dominant headwind for U.S. housing activity, suppressing transaction volume and limiting ad budgets tied to home sales.
In early December, Zillow economists forecast a modestly improving 2026 housing market, including:
- Home values up 1.2% in 2026 (after national values were generally flat in 2025, per Zillow). [22]
- Existing home sales of 4.26 million in 2026, a 4.3% increase over 2025, as affordability gradually improves and pent-up demand releases. [23]
- Multifamily rents up just 0.3% in 2026 (flat-ish), with affordability expected to improve in many markets. [24]
- Zillow also said mortgage rates are unlikely to fall below 6% in 2026, even if there’s some easing. [25]
For Zillow investors, the key takeaway is that the macro backdrop may be shifting from “frozen housing market” to “slow thaw.” That tends to support portal monetization—if buyer demand and agent competition reaccelerate.
Zillow stock forecast: where Wall Street targets stand after the selloff
Price targets are not guarantees, but they’re a useful snapshot of what analysts think is plausible under their base-case assumptions.
As of the latest widely tracked summaries:
- One consensus compilation showed an average target in the mid-to-high $80s, with a range spanning the mid-$60s to above $100, reflecting a wide dispersion of views on Zillow’s cycle sensitivity and competitive position. [26]
- Another tracker put the average target in the low $90s, again indicating that many analysts—before today’s panic—modeled meaningful upside from current levels. [27]
Zooming into today’s analyst commentary specifically:
The gap between $78 and $95 basically encodes the debate: is Google’s experiment a distant, manageable risk—or the beginning of a structural shift in where real estate discovery (and agent marketing spend) happens?
What to watch next: catalysts that could move Zillow shares
The next few weeks matter because today’s story is still early and incomplete. Here are the practical signposts investors and analysts are likely tracking:
- How real the Google rollout is
- Does Google expand beyond a handful of cities and mobile-only experiences? Or does the test remain narrow? [31]
- Data rights and MLS responses
- If the listing source is truly dependent on MLS distribution pathways, any pushback could limit or reshape the product. [32]
- Zillow’s own listing supply resilience
- Especially with MLS disputes like the Chicago-area MRED situation potentially escalating into early 2026. [33]
- Q4 results and 2026 guidance
- Zillow’s next earnings outlook will be scrutinized not just for revenue and EBITDA, but for commentary on traffic sources, funnel dynamics, and competitive positioning.
- The housing-rate narrative
- Zillow’s own economists see 2026 stabilizing, but still with rates above 6%—meaning the “rebound” may be gradual rather than explosive. [34]
Bottom line
Zillow stock’s Dec. 15 drop is a classic market moment where narrative risk overwhelms spreadsheet reality—at least temporarily. Google testing real estate listings inside Search is a credible strategic threat, because distribution control can reshape entire industries. [35]
At the same time, Zillow enters this scare with real strengths: substantial direct traffic, a massive app audience, improving profitability metrics in its last quarter, and a housing-market outlook that may be shifting from deep freeze to slow thaw. [36]
In other words: the fear is real, the moat might also be real, and the next chapter depends on whether Google’s test becomes a product—or remains an experiment.
References
1. www.barrons.com, 2. www.investing.com, 3. www.barrons.com, 4. www.barrons.com, 5. www.barrons.com, 6. www.barrons.com, 7. www.investing.com, 8. www.investing.com, 9. www.investing.com, 10. www.investing.com, 11. www.investing.com, 12. www.investing.com, 13. www.gurufocus.com, 14. www.inman.com, 15. www.investing.com, 16. investors.zillowgroup.com, 17. investors.zillowgroup.com, 18. investors.zillowgroup.com, 19. investors.zillowgroup.com, 20. investors.zillowgroup.com, 21. investors.zillowgroup.com, 22. zillow.mediaroom.com, 23. zillow.mediaroom.com, 24. zillow.mediaroom.com, 25. zillow.mediaroom.com, 26. stockscan.io, 27. www.marketbeat.com, 28. www.investing.com, 29. www.investing.com, 30. www.gurufocus.com, 31. www.barrons.com, 32. www.investing.com, 33. www.inman.com, 34. zillow.mediaroom.com, 35. www.barrons.com, 36. investors.zillowgroup.com
