Consolidation has slowed and data sharing has increased, and while some members worry about increased competition for property listings, for MLSs it’s an “expansion-based opportunity.”
Key Points:
- MLS members are generally demanding greater efficiency and want to avoid paying extra fees to access property information in their neighborhoods.
- But integrating MLS “will require some sacrifices” that may be hard for organizational leaders to swallow.
- Data sharing has become a popular alternative, but declining membership (and budgets) could lead to a return to consolidation.
In a country with over 500 multiple listing services, the pressure to consolidate is strong.
Real estate agents, brokers and even the National Association of Realtors have long called for fewer MLSs to avoid duplication of effort and increased fees.
But the recent trend has been to keep MLS as is but share the data, especially with the Aug. 17 deadline for making major changes under the NAR settlement looming. That may seem like an excuse, but MLS leaders insist it makes sense for them and their subscribers.
“Integration is hard because there are sacrifices people have to make,” said Daniel Jones, CEO of North Carolina Regional MLS, citing examples such as job losses and working with boards they’re unfamiliar with.
Jones said the NCRMLS “cooperative wholesale” model gives subscribers what they want — data consistency across regions without changing platforms — and also allows associations to remain unique and representative of their regions.
The evolution of data sharing
The motivation for data sharing has changed over time, says Clint Skutchan, SVP of institutional real estate at T3 Sixty. It’s not just about preventing consolidation, but bringing together larger data sets that don’t necessarily come from neighboring (or even the same) countries.
“So this is an opportunity based on expansion,” Skutchan said.
Beaches MLS, which covers parts of South Florida, signed a data-sharing agreement with the California Regional MLS in June and has also inked a deal with Bright MLS because those areas see a lot of migration to Florida, said Dionna Hall, CEO of Broward, Palm Beach & St. Lucie Real Estate, which operates Beaches MLS.
Hall has long been vocal about the benefits of working with MLS.
“I think part of the value of the MLS is that we’ve built it to serve the needs of local agents,” Hall says, “so our vast data sharing has allowed us to continue to specialize in our own market, but also expand into nearby specialty markets and areas of expertise, and by sharing that data, we’re able to fully represent the landscape in all markets for the benefit of the consumer.”
Competition and Control
According to the Real Estate Standards Organization (RESO), as of June 2024, there are 535 MLSs in the U.S. This is down from over 800 in 2016, but has remained fairly stable over the past two years.
The slowdown in consolidation is driven in part by members’ reluctance to allow more competition in the market, which Sukchan said is especially common in resort communities where members want to limit access to properties.
“Whether that actually happens is another story, but the perception is that if our data is shared widely, it will bring people into our marketplace,” Sukchan said.
The biggest driver for pursuing data sharing rather than consolidation appears to be maintaining local control and independence: In a 2017 study on consolidation, NAR found that the top concerns for small MLSs were loss of control over MLS finances, loss of revenue, lack of representation and duplication of services.
“Many respondents noted that geography and distance played a large role in their decision to oppose consolidation, as their members do not want other real estate agents who do not understand their local market to join the MLS,” NAR said in a 2017 post.
Will this trend continue?
This will likely remain a popular option as technological advances make it possible for members to share data while maintaining the same systems and platforms. Consolidation will also continue to happen, but this is a tricky proposition when consolidation needs to be done in a transparent way, such as through a vote among members, Skutchan said.
Patrick Lajeunesse, chief data officer at North Carolina Regional MLS, said consolidation is more like a battle: “Someone’s going to win and someone’s going to lose. Why would you want to do that if someone has to give up something?”
That could be due to major changes in the industry. Consolidation talks have intensified in the past 18 months, according to Sukuchan, as changes to the NAR settlement are coming up that could lead to fewer members. And fewer members means fewer people contributing to MLS budgets.
“I think financial space and organizational cohesion become even more important in this environment,” Skutchan said, especially as organizations have a better understanding of what enrollment attrition they will have to deal with.
“The best solution for the country would be for them to all be integrated, no matter how many MLSs there are, and have the data in one place.”
