Compass faced a sharp drop in its stock price this week after a media report said the New York Attorney General’s office is collecting information on the brokerage’s market share in New York City, following its acquisition of Anywhere Real Estate.
Shares fell nearly 15% soon after the report was published Wednesday, then recovered slightly to close the day down roughly 11%. The trading session had just a few hours left when the stock was still off by that margin.
What the state AG’s office is looking into
According to the report, which cited an unnamed source, the Attorney General’s office has contacted leaders at several of New York City’s largest brokerage firms as part of its inquiry. No formal announcement of an investigation has been made by the AG’s office.
Compass declined to comment when asked about the report or any potential probe.
The concern centers on whether Compass has gained too much control over the New York City market after it bought Anywhere Real Estate for $1.6 billion, a deal that closed in January and created Compass International Holdings.
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Regulatory review of the Anywhere deal moved fast
The merger cleared regulatory hurdles in just four months. That speed drew attention from a group of U.S. lawmakers, who sent a letter to the Department of Justice questioning the outcome.
“This decision raises questions about corruption under your watch and its impact on housing affordability for American families,” the lawmakers wrote. The letter was signed by six senators and 12 representatives.
Soon after the deal closed, reporters stated that antitrust enforcers at the Department of Justice wanted to investigate the merger but were overruled by senior officials. That report has not been independently confirmed by the Attorney General’s office.
Market share numbers are drawing scrutiny
A report from Capitol Forum released in December estimated that the combined transactions of Compass and Anywhere in Manhattan totaled more than 80% in 2024. The report suggested that figure would exceed government merger guidelines in several markets.
According to the Federal Trade Commission, market shares above 30% can indicate a merger “may be to eliminate substantial competition.” The Manhattan figure, if accurate, would far surpass that threshold.
The FTC guidelines are used to assess whether a merger could harm competition, but they are not a hard legal limit. Enforcers weigh other factors, including barriers to entry and the potential for new competitors to emerge.
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It remains unclear whether the New York AG’s inquiry will lead to formal action. The office has not shared any timeline or specific allegations.
Compass’s position in a shifting market
Compass has grown aggressively in recent years, using venture capital to expand its agent count and technology platform. The Anywhere acquisition added thousands of agents and a larger footprint in luxury and traditional residential sales.
Some industry observers have questioned whether such concentration gives Compass too much influence over commissions and listings in key markets like Manhattan. But the company has defended its growth as pro-competitive, arguing that scale allows it to offer better tools and lower costs to agents and consumers.
The real estate market in New York City is already under pressure from high interest rates and sluggish sales volume. An antitrust probe could add regulatory uncertainty on top of those challenges.
For now, the only public signal is the report that the AG’s office has reached out to brokerage leaders. That kind of information-gathering is common at the start of an inquiry and does not necessarily mean charges or a lawsuit will follow.
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Still, the stock market’s reaction suggests investors are taking the possibility seriously. Compass shares have been volatile since the Anywhere deal closed, and the company has yet to post a full-year profit despite its revenue growth.
Lawmakers remain skeptical
The letter from U.S. lawmakers to the DOJ reflects a broader bipartisan unease about consolidation in housing markets. Critics argue that large brokerages can distort pricing and limit choices for homebuyers and sellers, especially in high-cost cities.
That skepticism has not translated into new federal legislation, but state-level antitrust enforcement has become more active in recent years. New York’s Attorney General, Letitia James, has pursued investigations into industries ranging from tech to real estate.
Whether Compass becomes the next target remains to be seen. The company says it operates in a highly competitive environment with many smaller and regional firms still commanding significant market share outside Manhattan.
One thing is certain: the Anywhere deal, which was supposed to cement Compass’s position as a national leader, is now drawing the kind of attention the company likely hoped to avoid.
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