What Happened?
Shares of online real estate marketplace Zillow (NASDAQ: ZG) fell 8.1% in the afternoon session after reports surfaced that Google was testing a new feature to display home sale listings directly within its search results.
This test, which appeared on mobile devices in select markets, showed full property ads with details and options to request tours, placing them above Zillow's own listings. The move by the search giant sparked fears of significant new competition for Zillow, which relies on search traffic to attract users. The concern was that Google's direct entry into real estate listings could disrupt the market and negatively affect Zillow's core business. The news also impacted other real estate technology stocks, including Rocket Companies and Compass, which also saw their shares decline.
The shares closed the day at $66.67, down 7.9% from previous close.
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What Is The Market Telling Us
Zillow’s shares are somewhat volatile and have had 12 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 24 days ago when the stock gained 6.4% on the news that comments from a key Federal Reserve official bolstered hopes for an interest rate cut. New York Federal Reserve President John Williams stated he sees “room for a further adjustment” in the near term, sparking a significant market rally. Following his remarks, the probability of the central bank cutting rates at its December meeting jumped from 39% to over 73%, according to the CME FedWatch tool. This positive sentiment provided relief to markets amid concerns over high valuations, particularly in AI-related stocks.
Zillow is down 5% since the beginning of the year, and at $66.59 per share, it is trading 23.3% below its 52-week high of $86.76 from September 2025. Investors who bought $1,000 worth of Zillow’s shares 5 years ago would now be looking at an investment worth $482.22.
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