Warning: Zillow Traffic Slowing, Says Barclays

Barclays, self-described long-term supporters of Zillow Group Inc Z, issued a warning this morning while downgrading the company to Equal Weight from Overweight. Barclays analysts expressed concern that traffic growth for Zillow and Trulia brands is slowing, indicating that the market may be saturated.

While the analysts said that Zillow is "fundamentally changing the way consumers discover homes for the better," the year-over-year growth in traffic is drastic. In January 2015, monthly traffic grew at 24 percent, compared with 52 percent growth in January 2014. Since then, Barclays noted, Zillow stopped reporting monthly traffic trends, stoking uncertainty.

Additionally, to get more inventory from realtors, Barclays said that it expects Zillow to discount national deals with large brokerages. Eventually, the company may be able to "re-price these deals at a substantial premium;" however, that will not help the company in the near term.

Zillow is near the low end of its 52-week range ($84.64 to $164.90), closing on Friday at $100.86. Year-to-date, the company has shed 4.75 percent.