Mail Stop 4561

March 23, 2006

VIA U.S. MAIL AND FAX (301)718-2444

Frank A. Carchedi
Chief Financial Officer
CoStar Group, Inc.
2 Bethesda Metro Center, 10th Floor
Bethesda, Maryland 20814


Re:	CoStar Group, Inc.
	Form 10-K for Fiscal Year Ended
	December 31, 2005
	Filed March 7, 2006
	File No. 000-24531

Dear Mr. Carchedi:

      We have reviewed your filing and have the following
comments.
In some of our comments, we may ask you to provide us with
information so we may better understand your disclosure.  After
reviewing this information, we may raise additional comments.

	Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comment or on any other
aspect
of our review.  Feel free to call us at the telephone numbers
listed
at the end of this letter.


Form 10-K for the year ended December 31, 2005

Item 7. Management`s Discussion and Analysis of Financial
Condition
and Results of Operations.

Liquidity and Capital Resources, page 30.

1. We note your disclosure that you incurred approximately $4.8
million in capital expenditures related to building photography
costs
during the current year.  Tell us the nature of these costs and
how
you determined these were not internally developed intangible
assets
which should be expensed rather than capitalized based on
paragraph
10 of SFAS 142.


*    *    *    *

      Please respond to these comments within 10 business days or
tell us when you will provide us with a response.  Please
understand
that we may have additional comments after reviewing your
responses
to our comments.

	We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision.  Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.

      In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that

* the company is responsible for the adequacy and accuracy of the
disclosure in the filings;

* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filings; and


* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

      In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filings or
in
response to our comments on your filings.


You may contact Robert Telewicz, Staff Accountant, at (202) 551-
3438
or the undersigned at (202) 551-3498 if you have questions.



Sincerely,



Linda van Doorn
Senior Assistant Chief Accountant




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Frank A. Carchedi
CoStar Group, Inc.
March 23, 2006
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