Zillow is celebrating its 20th anniversary amid a frozen housing market, but CEO Jeremy Wacksman isn't worried about transaction volumes - he's focused on capturing a bigger slice of every deal. In a wide-ranging interview with The Verge's Decoder podcast, Wacksman laid out how the real estate giant is transforming from a listings aggregator into a vertically integrated transaction platform, while navigating thorny battles over database access, AI-generated listing slop, and the looming threat of chatbot disaggregation. With only single-digit transaction share despite 60-70% of homebuyers using the app monthly, Zillow's growth strategy hinges on convincing agents to adopt its software stack - even as the company enforces controversial listing policies that have landed it in lawsuits with competitors like Compass.
Zillow just marked two decades since launching the Zestimate, but CEO Jeremy Wacksman is thinking less about the company's past as a listing aggregator and more about its future as a transaction engine. In a revealing conversation on The Verge's Decoder podcast, Wacksman opened up about the gnarly database politics, vertical integration strategy, and existential AI threats facing the PropTech giant as it navigates America's housing affordability crisis.
The numbers tell a surprising story. Despite Zillow's ubiquity - the app reaches 60-70% of all homebuyers monthly, making it more searched than the term "real estate" on Google - the company participates in only single-digit percentages of actual transactions. That massive gap represents Zillow's growth opportunity, even as the broader housing market remains frozen at 4 million annual home sales, down from a historical norm of 6 million.
"Having a small percentage of a number that is flat allows Zillow to grow and gain share even when the market is depressed," Wacksman explained. The company now measures success not by eyeballs but by transactions where it provides agents, loan officers, or software to facilitate deals.
That shift from advertising marketplace to transaction platform has required dramatic changes to Zillow's business model. The company now originates mortgages directly rather than just selling leads to lenders. It builds customer relationship management software that agents use to manage all their clients, not just Zillow referrals. And it's deploying AI tools like Zillow Showcase to generate realistic 3D virtual tours from drone photography.
"We're first and foremost technology innovators," Wacksman said of the company's 7,000-person workforce, split roughly half-and-half between "fixed" costs like product engineering and "variable" costs like loan officers and account managers that scale with revenue.
But Zillow's growth ambitions run headlong into the messy politics of real estate databases. The industry operates on a unique model where over 500 regional Multiple Listing Services (MLSs) maintained by realtor groups share listings openly across competitors. Zillow, Realtor.com, and other sites all display the same inventory - a structure Wacksman called "an incredible public good" that exists nowhere else in the world.
That cooperative model faces pressure from recent changes to broker compensation. After major settlements around realtor fee structures, some large brokerages like Compass are experimenting with "windowing" - showing listings privately to their own network before publishing them widely. Zillow's response has been hardline: its 24-hour policy requires that any listing added to Zillow must appear within 24 hours of going on the MLS, or it won't be displayed at all.
"We don't think you should be able to free ride and only give the internet the listings that you want and still get access to everyone else's listing," Wacksman said, defending the policy that's now the subject of litigation with Compass. The CEO argued that selective marketing harms sellers who overwhelmingly prefer maximum exposure for their properties.
The affordability crisis looms over everything. Home prices have surged nearly 100% in many markets since pre-pandemic levels, while mortgage rates that sat at 2-3% during the pandemic have climbed to 5-6%, creating a lock-in effect where existing homeowners won't move. "We're 2 million off a normalized market and it's not really budging," Wacksman noted.
But the problem isn't just rates - it's supply. Zillow estimates the US is nearly 5 million homes underbuilt, the accumulated result of construction slowing after the 2008 financial crisis. "The affordability crisis is an availability problem," Wacksman said, arguing that both new construction and unlocking existing inventory through lower rates will be needed to restore market function.
For Zillow, the bigger strategic question is whether its aggregator model survives the AI era. If users can just ask Gemini or Siri "how much is that beach house worth" and get an answer without opening Zillow's app, does the company lose its customer acquisition advantage?
Wacksman acknowledged the threat but argued that real estate's complexity creates defensibility. "When they get into the category of actually transacting, they're going to want to use our software workflows, data and people to transact," he said. The company sees AI assistants as potentially just a new top-of-funnel source, with the real value in the transaction infrastructure Zillow is building.
That infrastructure focus explains Zillow's tolerance for commodity listing data. Unlike other marketplaces that lock in unique content, Zillow accepts that any innovation will quickly be copied across competitors. "Any innovation today is going to become commoditized in table stakes," Wacksman said. "We're going to bend towards open and platform support because we still need to get all this tech, whether it's Zillow's or not, to be across more of the content."
The company maintains 80% of its traffic comes free and direct, rather than through paid acquisition or search. But that metric could shift if AI assistants become primary interfaces for casual real estate browsing.
Zillow also faces the content moderation challenge plaguing every platform in the AI age: listing slop. Over-HDR'd photos and AI-generated staging that bears little resemblance to reality are proliferating across the platform. Wacksman argued that MLS rules requiring licensed professionals to verify listings provide some protection, and that market incentives discourage outright fraud since buyers eventually tour properties in person.
The company is trying to flip the script by using AI to generate more realistic rather than less realistic representations. Its Showcase tool creates full 3D flyovers from drone photography, revealing aspects of properties that agents might prefer to hide but that buyers want to see. "We can show that when you generate a more realistic version of things, it actually provides more demand," Wacksman claimed, though adoption remains at just 3-5% of listings.
As Zillow rang the opening bell at the stock exchange to mark its 20th anniversary, Wacksman's vision was clear: transform the company from entertainment app to essential transaction infrastructure. "We want to get to a place where you can open the app - you're messaging with your agent inside of the app, you're getting pre-approved in the app, you're closing the app, you're signing in the app," he said.
Whether real estate agents, who jealously guard local relationships and expertise, will cede that much control to a national platform remains the billion-dollar question. Zillow's bet is that freeing agents from busywork will let them focus on the high-touch negotiation and consultation that humans still do best - at least until the next wave of AI comes for that, too.
Zillow's 20-year evolution from listing aggregator to transaction platform reflects a broader shift in how tech companies capture value - not by controlling content, but by owning the workflow. As AI threatens to disaggregate the top of the funnel where casual browsers discover listings, Wacksman is betting that the messy, regulated, relationship-driven middle of real estate transactions creates a defensible moat. But that strategy requires convincing hundreds of thousands of independent agent-entrepreneurs to adopt Zillow's software stack while navigating database politics that pit the company against powerful brokerages trying to close their ecosystems. In a housing market frozen by affordability challenges and mortgage rate lock-in, Zillow's ability to grow by taking share rather than riding market expansion will test whether platform-level scale can truly transform a business as fundamentally local as real estate.
