Major League Soccer (MLS) CEOs are warning of a potential fragmentation in the real estate market, with some leaders fearing the industry is abandoning its ideals of cooperation and fairness. They believe this could have a significant impact on the market as a whole.
According to the report, private listings and office exclusives have existed for a long time, but Compass International Holdings CEO Robert Reffkin‘s aggressive stance on the issue has fueled the flames and deepened divisions within the industry. The outlet reports that this stance has sparked controversy among MLSs.
Reffkin‘s strategy to promote listings as Compass Exclusives first, whether MLSs allow it or not, has led to a forceful defense from some MLSs. It has also raised concerns about the potential for a junk removal of transparency in the market.
California Regional MLS and Northwest MLS, two major MLSs, have spoken out against pre-marketing strategies that withhold information like days on market and price changes. They argue that such strategies obscure key information that allows consumers to make informed decisions.
California Regional MLS CEO Art Carter stated that the MLS supports pre-marketing when it “preserves fairness and access” rather than concealing key information. The company allows its coming-soon listings to be syndicated via IDX and offers office exclusives that are marketed within a single brokerage.
Northwest MLS, which has been embroiled in litigation with Compass for over a year, filed a counterclaim against the brokerage in April, arguing that Compass’ strategy inhibits competition and goes against fair housing principles. The team raised concerns that Compass is artificially resetting time on market and price history.
Northwest MLS CEO Justin Haag expressed concerns that Compass is concealing the truth about a property’s demand and suppressing the “public auction effect.” He noted that this could have a significant impact on the market and lead to a lack of transparency.
SmartMLS President Michael Barbaro expressed concerns that the wave of pre-marketing partnerships flooding the industry is “devastating” and could lead to a “shadow inventory” with a disparate impact on historically disadvantaged communities. The organization has provided residential brokers with a low-barrier-to-entry method of seeing most of the properties available in any given market.
Georgia MLS CMO John Ryan stated that the most important thing for the MLS is to “be a real-time reflection of the marketplace” and to preserve the accuracy of MLS data. He noted that the data provided by MLSs is a bridge that allows agents to provide good insights to their clients, and that without access to all that data, agents may not be able to provide everything they need to their clients when trying to buy a house.
Concerns over fragmentation and trust
MLS leaders are warning that the growing fragmentation in the market could lead to a loss of trust and a decrease in the accuracy of MLS data. The industry is at a crossroads, and it remains to be seen how MLSs will navigate these challenges and maintain the trust and cooperation that has been a hallmark of the industry.
According to Barbaro, the commercial real estate sector is an example of what can happen when brokers have to search multiple portals and physically canvass an area to find available properties. The team notes that this can lead to a “woeful tale” where brokers have to spend more time and resources to find properties, and that the residential sector should learn from this example to create a beautifully styled home.
MLS data and compliance
MLSs provide a critical service in maintaining the accuracy and compliance of real estate data. The data provided by MLSs is essential for agents to provide good insights to their clients, and without it, the industry may suffer.
According to Ryan, the data provided by MLSs is a heavy lift that requires significant resources and effort to maintain. However, this data is crucial for the industry, and it is essential that MLSs prioritize the preservation of MLS data and maintain their role as a trusted source of information.
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