Dark truth about Zillow: Real estate site's 'terrifying' secret plan

Jared James has seen plenty of housing bubbles, busts and bad decisions in his two decades as one of America's most recognizable realtors.

But nothing, he said, compares to the quiet juggernaut now tightening its grip around the entire US housing market.

That juggernaut is Zillow - the billion-dollar listings platform that started as a quirky Seattle start-up and has since become the most powerful force in North American real estate.

A company so dominant, James warned, that buyers and sellers may soon have no choice but to bow to it.

'They're building their own little App Store,' James told the Daily Mail.

'Once a consumer is inside, they'll never leave the ecosystem. They're way closer to achieving this than everybody realizes.'

It's a dramatic forecast for Zillow's growing clout, but the numbers back him up.

In the 20 years since it launched, Zillow has rewritten the rules of home buying. It draws in more than half of all real-estate web traffic in the US - more than double its nearest rival.

Zillow started out as a real-estate listing service. Twenty years later, it has gobbled up swathes of the entire market

Celebrity realtor Jared James (pictured) said the listings giant will soon have a 'terrifying' monopoly on the market

A staggering 227 million people 'Zillow surf' every month, clicking through dream mansions, gawking at improbable castles or checking the 'Zestimate' on their neighbor's house just to feel better - or worse - about their own.

The name itself has become a verb - and a compulsion. But, James said, America's Zillow obsession carries a price - and that price is control.

Zillow is on track to command three-quarters of all online real-estate activity within two years, a level of dominance he called nothing short of 'terrifying.'

Once Zillow reaches that point, he warned, the company may be able to push consumers anywhere it wants - to its preferred lenders, its favored agents, its own closing services and mortgage products.

'The entire process becomes a call center. Choice disappears,' he said.

James is far from alone in his fears. Realtors have long bristled at Zillow's influence, but this year the pushback exploded into a wave of lawsuits and a federal antitrust offensive that could shape the future of America's $55trillion housing market.

In September, the Federal Trade Commission (FTC) filed a lawsuit accusing Zillow of an illegal, anti-competitive deal with rival Redfin - an arrangement the agency said was designed to smother competition in rental advertising.

Zillow is also being sued by brokerage firm Compass, which accused the platform of squeezing out competing listings.

At least two class-actions have alleged the company steers buyers toward Zillow-affiliated agents who fork over huge slices of their commissions - as much as 40 percent - for the privilege of staying visible.

Zillow has denied it all. The firm has repeatedly said its innovations empower consumers, increase transparency and keep the market competitive.

The company did not answer the Daily Mail's request for comment, but has said in other statements that it complies fully with all laws and wants a 'thriving, competitive marketplace.'

Eri Uerkwitz (pictured), a banking and finance lawyer at Mayer Brown, and her husband have said Zillow's incorrect flood risk rating caused buyers to pull offers on their house

The couple bought the 2,313-sq-ft, three-bedroom, four-bathroom house in Chappaqua, New York, for $1.1million in June 2022, and expected a similar selling price

Andrew Uerkwitz (pictured), head of investor relations for video game giant Electronic Arts, and his wife sued Zillow and First Street Technology for $500,000

But the criticism keeps mounting. Zillow's latest controversy answered the question of whether the company is too powerful for its own good.

In November, Zillow quietly removed a feature that displayed climate-risk data on home listings - a tool that warned buyers about a property's vulnerability to flooding, wildfire, extreme heat, wind or poor air quality.

The feature, introduced in 2024, sounded simple enough - useful, perhaps even lifesaving, information - but the feature quickly detonated into a market-shaking controversy.

When it went live, real-estate agents revolted, homeowners protested, and the California Regional Multiple Listing Service (CRMLS) blasted the scores as 'arbitrary,' impossible to challenge and destructive to home prices.

They weren't wrong. In the celebrity-filled enclave of Chappaqua, New York, Andrew and Eri Uerkwitz watched helplessly as buyers fled from their charming family home after Zillow flagged it as a 9/10 'extreme flood risk.'

Deal after deal collapsed. The house eventually sold for $999,000 - far below its $1.15 million asking price and at a $100,000 loss for the couple, who have now sued Zillow and the climate-data provider.

'The designation is factually inaccurate,' their lawsuit states. It pointed to federal flood maps, insurance inspections and the physical layout of the property. The case is ongoing.

Zillow declined the Daily Mail's request to comment on the lawsuit. When asked about the removal of climate risk data, spokeswoman Claire Carroll said in a statement that the company remains committed to providing consumers with information that helps them make informed decisions.

For James, the U-turn on climate risk data proved his point. The company wanted another sticky feature to keep users inside its walled garden, he argued – another reason to shop, browse, borrow and close without leaving the platform.

In this case, he said, Zillow removed the feature because of the backlash.

To understand how Zillow became so dominant, James said you need to go back to its origins.

Zillow's $16million-a-year CEO Jeremy Wacksman (pictured) said the company's mission is to give consumers the tools, information and services they need to feel empowered

Founded in 2004, Zillow was the brainchild of Rich Barton and Lloyd Frink - former Expedia executives who had already upended the travel industry by building a central marketplace where consumers could shop for flights and hotels directly, bypassing traditional agents.

Zillow aimed to do the same for real estate. The name was a mash-up of 'zillions' of data points and the 'pillow' homeowners put their heads on at night.

Its killer feature: the Zestimate, a computer-generated valuation for more than 100 million homes in America. Some users loved it, some hated it. But everyone looked.

Zillow made money by selling exposure. Agents paid thousands of dollars a month to advertise, purchasing access to the millions of buyers and sellers pouring through the site every day.

Those who paid more got more visibility. Those who paid less, or refused, risked disappearing.

Now, Zillow is expanding everywhere - into rentals, mortgages, title, escrow. The firm's newest mission is to build a 'housing super app' - a one-stop digital pipeline where a buyer can search, tour, finance and close without ever leaving Zillow's domain.

They're doing something right. The company is on track to turn a profit for the first time since 2012, recording $10million in net income in the first half of 2025. It employs roughly 9,000 people and is valued at $18billion.

But James, host of his podcast titled Today, said there is a darker side to the success story.

He alleged Zillow is trying to sideline local agents entirely - replacing specialists with call-center reps who don't know the neighborhood, the schools or the history behind the listing.

'This isn't good for the industry, and it's not good for consumers,' James said. 'Once you stifle competition, every part of the process becomes a call center.'

James pointed to a raft of lawsuits that chime with complaints he heard from agents about being muscled by the listings giant.

A lawsuit filed this month in Seattle alleged Zillow used 'kickbacks' and incentives to tie leads to Zillow Home Loans referrals.

Zillow's recent expansion into home loans is part of the firm's aggressive push to dominate the housing market

The US property market was ripe for disruption, with soaring housing prices and realtors demanding hefty six percent commissions from sales, experts have said

The filing includes testimony from a dozen Zillow agents and loan officers, all describing alleged pressure to steer clients into the company's financial products.

Internal documents cite a 'carrot and stick' approach: agents who complied got better leads, those who didn't saw their leads 'throttled,' it claimed.

Compass's antitrust lawsuit claimed Zillow punished listings that appeared on competing platforms.

Another class-action suit filed in September accused Zillow of pushing buyers toward 'premier agents' who pay steep commissions to the firm in exchange for placement - allegedly misleading buyers into thinking the platform is recommending the best agents, not the highest bidders.

And then there's the big one: the FTC's federal antitrust case has accused Zillow of paying Redfin $100million to shut down part of its rental-advertising business and redirect customers to Zillow.

Zillow has insisted it has done nothing wrong. The company said in a statement that the lawsuit filed in September 'fundamentally misrepresents how Zillow operates.' It also claimed the Compass and FTC antitrust allegations are baseless and incorrect.

CEO Jeremy Wacksman, who earns $16million a year, told Stratechery that the company's mission is simple: Give consumers the tools, information and services they need to feel empowered - not manipulated.

Zillow's supporters have noted that the property market was ripe for disruption, amid soaring housing prices and realtors demanding hefty six percent commissions from sales.

Tech experts meanwhile note that Zillow is not alone, and claim all major platforms aim to create end-to-end ecosystems.

Despite the dip in home purchases, 'Zillow surfing' - browsing the site (pictured) with little intention of buying - is just as prevalent as ever

But James said Zillow's size has turned it into something far more dangerous.

'They've crushed their reputation within the real-estate industry,' he told the Daily Mail.

If Zillow succeeds in its strategy, he predicted, it won't just be agents who lose out.

Consumers will too, he claimed, because competition will evaporate, local knowledge will wither, and buyers will be directed toward Zillow-owned lenders, inspectors and closing services regardless of whether they are the best option.

Zillow, James said, has achieved the 'zillions' of data points its name promised. But in doing so, it has smothered the cozy 'pillow' comfort it once offered - replacing it with a sprawling digital empire that threatens to swallow the entire housing market.

'We've seen this movie before in other industries,' he said. 'It never ends well for the little guy.'