Realtor Shakeup

In just 3 hours, a Missouri jury found that realtors have been illegally inflating commissions. With similar cases on the docket nationwide, the residential real estate industry is set for a shakeup. A counter-intuitive trend in real estate that demonstrates the market power of realtors has been the decline in for-sale-by-owner (FSBO) transactions despite the rise of the internet. The internet has historically enabled buyers and sellers to transact directly without gatekeepers such as realtors. In the case of residential real estate, realtors have managed to beat the internet so far.

It Was A Boom

The Realtor profession has grown at rate 3x faster than the rate of household growth for almost a century.

Saturation & Consolidation

The growth in realtors has saturated the marketplace. In addition, platforms like Redfin have enabled more realtors to work part-time. If brokerage commissions come under pressure after the verdict, we should expect to see consolidation and a decline in the number of realtors.