MLS Consolidation On the Way & What it Means to Consumers & Agents
To paraphrase the Greek philosopher Heraclitus, "the only constant (in real estate) is change". And if national real estate experts have anything to say about it, we are looking at another incoming wave of change in the way we deliver real estate listing data to the public.
A panel discussion at the recent Inman Connect event in New York revealed what's in store for our industry. The big revelation was the prediction that we will see perhaps a dozen large regional MLSs across America within the next decade or so, in place of the approximately 750 MLS entities now in existence.
At the present time, industry experts view today's MLS organizations as a mess, described as monopolistic, anticompetitive and slow-moving. Most MLSs are owned by local Realtor associations. And therein lies a big part of the problem.
Navigating our way towards a dozen or so large regional MLSs will take time. It won't happen overnight and there will be local MLSs (and local Realtor Associations) that will fight to slow down the inevitable change.
The problem with small local MLS entities is more than Association politics. Small MLSs overlap territories with larger, more efficient MLSs. There is duplication in MLS numbering, which adds confusion for buyers and sellers. Tiny MLSs typically represent a small property inventory (which becomes glaringly apparent when sellers are on the sidelines) and they lack the financial resources to keep up with the latest technology, which results in poorly-served buyers and sellers.
In our Apostle Islands area (Ashland and Bayfield counties in northwest Wisconsin), we have three different MLSs serving roughly the same territory. Some listings appear on SAAR (the Superior Area Association of Realtors), others on NorthstarMLS (RMLS of Minnesota & Wisconsin) and still others on the Northwest Wisconsin MLS (RANWW or Realtor Association of Northwest Wisconsin).
The largest membership among these MLS entities in the Apostle Islands is NorthstarMLS, with over 17,000 agents and brokers in Minnesota and Wisconsin. RANWW, headquartered in Eau Claire, has probably the second largest agent membership roster. And SAAR is the smallest of the three, with perhaps fewer than 150 paid members.
Small MLSs under 150 - 200 members are being targeted for extinction, according to industry experts. These will likely be the first to be consolidated into larger regional MLS entities. [That prediction is essentially a quote from a speaker at Inman Connect, not my personal opinion.]
Along with the consolidation of MLSs, we will probably see some immediate improvements in professionalism and service to the public. There will likely be fewer pocket listings, fewer agents practicing dual agency and more peer pressure to observe ethical guidelines. The new industry model may not be as quaint or folksy as some would like, but real estate consumers should definitely benefit.