Technological innovation has made it cheaper, easier, and faster to buy and sell most products. However, the real estate industry has firmly resisted disruption, successfully lobbying for state laws banning commission rebates, preventing the public disclosure of residential sales prices, and requiring consumers to purchase real estate services that they may not want, as well as blocking third parties from accessing listing data. These practices have allowed the industry to preserve the long-standing fixed commissions for brokers even as home prices have climbed much faster than inflation.
In 2005, the U.S. Department of Justice brought an antitrust lawsuit against the National Association of Realtors for its anti-competitive policies that were designed to exclude lower-cost online real estate startups from competing with traditional brokers. This lawsuit resulted in a 10-year settlement that prohibited local MLSs from enacting rules that limit competition; however, this agreement expires this year.
Join ITIF for a panel discussion about the challenges and opportunities to increase competition in the real estate industry through technological innovation, and the role that policymakers can play in using technology to make home ownership more affordable.