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Thirty-five years ago, television experienced its greatest crisis.
It was 1990, and Star Trek: The Next Generation was a blockbuster. At the helm of the show was Captain Picard, played by Patrick Stewart, a pillar of sound leadership and moral rectitude.
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In the show’s third season finale, the zombie-like Borg kidnap Picard and turn him into one of their own. The finale ends with Picard as the Borg telling his former crew members that they, too, will be turned into automatons. Picard’s right-hand man gives the order to destroy the Borg, and then the credits roll.
Viewers had to wait months to find out if Picard or any of the Trek cast would survive (spoiler: they did).
This moment was revolutionary in the pre-streaming era, and decades later it’s still considered the best cliffhanger in TV history.
But it’s worth bringing up here because it provides a kind of metaphor for what will happen to the real estate industry in 2024. Thanks to legal action, government pressure, turbulent markets, and other factors, real estate is facing one of the most difficult and most disruptive challenges. For years in living memory.
But also, like any action-packed TV show, it’s not very clear where the story is headed at this point. Will buyers abandon their agents? Will the government bring down the hammer? Will a lawsuit break the status quo? Is resistance futile?
Mr. Inman has set out to answer many of these questions in recent weeks in his ongoing year-end coverage. But also, many questions remain unanswered. The past 12 months have been full of turmoil, and we still don’t know what that turmoil means or where it will lead.
In other words, real estate is stuck in a scenario not unlike that old Star Trek finale scenario. As 2024 draws to a close, the industry is on the brink.
With that in mind, here are the biggest news stories that have taken 2024 by storm and are still keeping us on our toes.
Committee litigation prevails
After all, the only thing that eclipsed all other stories in 2024 was the Antitrust Commission case. You probably know the gist of it, but to review: home sellers have filed lawsuits in recent years accusing industry players of keeping costs high, and last year a jury found that home sellers I stood to the side.
However, in 2024, things changed completely. Most notably, NAR settled a home seller lawsuit in March, agreeing to pay $418 million and various policy changes. These rule changes went into effect in August, and the NAR settlement received final approval last month. The NAR settlement targeted smaller intermediaries, with various larger intermediaries settling throughout the year.
So, the case is solved, right?
Wrong.
In fact, the commission lawsuit may represent the biggest crisis the real estate industry has ever faced. For now, unanswered questions remain regarding the fate of the appeal and the long-term response of regulators and the public.
Las Cofano
Leaders who spoke with Inman agreed there are many more chapters to this story. For example, industry veteran Russ Cofano, CEO of Collabra Technology, described 2024 as a “tipping point for the industry.”
“I think this year will be seen as a historically significant catalytic year in terms of changing business practices in the industry,” he said. “I think you’re going to see some real changes happening over the next few years.”
rob hearn
Real estate strategist Rob Hearn offered a similar interpretation, describing 2024 as “the year that changed everything,” but adding that it was “the introduction of the first chapter” of what’s next for the real estate industry.
“I think this is like the first chapter of a new book,” Hahn added.
These characteristics were common among the leaders who spoke with Inman. The key, therefore, is not to answer all remaining questions, but rather to note the questions that remain. We have (at least) a two-part episode underway and the conclusion will have to wait for next season.
catch up:
Integration looms
The Commission case represents the biggest crisis for the real estate industry heading into 2024, but there are many others, and Compass represents one of the biggest. Part of that has to do with CEO Robert Refkin leading an end to NAR’s explicit cooperation policy (see below for details).
But that’s also because Compass made a major acquisition this year. In the spring, for example, Compass featured Latter & Blum. And earlier this month, the brokerage made even bigger news when it revealed it had acquired @properties Christie’s International Real Estate.
This basically creates two problems. The first is simply that Compass had a good year. In fact, in conversations with various industry executives for this article, Compass came up more consistently than any other brokerage firm. So one thing to watch in 2025 is how long the Compass can maintain their winning streak.
But secondly, the compass movement points to a larger trend toward consolidation. After all, consider that @properties itself acquired Christie’s just three years ago. Compass’ entry and consolidation of brands is reminiscent of consolidation in the food industry in recent decades, where only a few large companies remained. It’s why Pepsi makes Lay’s potato chips and why Nestlé makes DiGiorno pizza.
Jason Aleem
The real estate industry has a long way to go before it becomes as integrated as the food industry. But realignment has come up in conversations again and again, both as a theme for 2024 and as something to watch for in 2025.
“We’re going to see more and more consolidation,” Jason Aleem, head of real estate services at Redfin, said in a conversation earlier this month.
“I think you’re going to see a lot of consolidation, a lot of opportunities, a lot of companies being sold or consolidated,” Chris Heller, president of OJO/Movoto, told Inman last month.
Howard “Hobie” Hannah III
“We’re very active and bullish on M&A right now,” said Hobie Hanna, CEO of Howard Hanna.
This is just one example of similar comments Inman has collected recently. And the basic gist of the argument is that disruption in 2024 could give an advantage to larger companies. However, it remains to be seen who will be acquired or assimilated by whom.
catch up:
consumer questions
Another big issue today has to do with what consumers do next.
So far, Inman Intel polling has found that most buyers aren’t negotiating lower fees with their agents, and most sellers aren’t willing to pay their buyers’ brokers. . So the status quo will remain, but that in itself will be a major point from 2024 onwards.
Still, Intel’s findings also show downward pressure on fees is increasing, with sellers realizing they don’t have to pay buyer agent fees, at least not now. In addition, millions of postcards, emails, and other notifications have been sent to consumers about the settlement, further raising awareness of the situation. And importantly, real estate experts who responded to Intel’s poll this fall said it’s too early to tell how consumers will react.
So, cliffhanger. to be continued.
ben bear
In conversations with Inman, some leaders predicted that while the future may be relatively similar to the present, there are other possible permutations. One, raised by Turbo Home CEO Ben Baer, is that the NAR settlement could drive buyers to discount or flat-fee brokers.
“That theory is proving true,” Baer told Inman. “So we launched in the Bay Area and expanded to Texas and Washington, and within two months we had about $18 million in deals.”
It’s worth noting that flat-fee brokers struggled in 2024. For example, the once-popular Homie has shrunk and is suing NAR for essentially putting it out of business. In fact, the struggles of flat rate brokerages and other high-tech housing concepts (see also iBuying) were an important subplot in 2024. But Baer argued, at least to Inman, that the NAR settlement would raise consumer awareness about how intermediaries are compensated and potentially give intermediaries a boost. People trying out new models.
This is just one theory, but Baer isn’t the only one to bring it up. For example, when Mr. Inman asked Mr. Hahn whether fee litigation could lead to the creation of discount intermediaries, Mr. Hahn replied, “Absolutely.” Mr. Hahn, unlike Mr. Baer, does not run a discount brokerage firm, but he speculated that traditional brokerages may eventually adopt characteristics traditionally associated with discount brokerages.
It’s worth noting here that 2024 is turning out to be one of the worst years for home sales in decades, with mortgage rates not falling as much as many expected. That’s true. Therefore, one of the biggest cliffhangers for 2024 will be how a host of variables, including pricing, inventory, litigation, and new models, will reshape consumer behavior.
catch up:
The National Association of Realtors’ predicament
While NAR’s commission lawsuit garnered industry attention in 2024, many other issues related to industry associations also made headlines and remain unresolved. Perhaps the biggest issue is the battle between NAR and the Department of Justice, which industry groups hope will be decided by the Supreme Court. Few leaders had any idea where this story was going next.
“I don’t think anyone really knows where the top people at the Justice Department are,” Cofano said, capturing a common sentiment. “If they say they’re doing that, I think they’re just blowing smoke.”
It’s also important to remember that the Justice Department is an even bigger wild card than usual, as Donald Trump will win the November presidential election and appoint new leadership for the department. It is. Most leaders who spoke with Mr. Inman did not believe that Mr. Trump’s victory would completely end the Justice Department’s interest in the real estate industry. However, many speculated that Trump’s victory could change the conflict between NAR and the Department of Justice.
Separate from the Justice Department, a battle is currently heating up over NAR’s clear cooperation policy, which requires brokers to list on NAR-affiliated MLSs. This issue sharply divided the opinions of leaders in 2024. But so far, the NAR has taken no action, meaning the next round of the rule won’t go into effect until next year.
Finally, NAR is under constant criticism in 2024 for various governance issues. This story actually started with a scandal in 2023. These scandals ultimately led to current NAR Chairman Kevin Sears taking office in January. Mr. Sears has been traveling to the United States in 2024 to reassure members and break down the organization’s stance on committee lawsuits and other issues. Mr. Sears appears to have stabilized the company to some degree, but NAR has nonetheless faced increased scrutiny in recent days over issues such as finance and spending.
amy lessinger
While all of these issues seem to put NAR in jeopardy in 2024, many of those who spoke with Inman believe it’s ready for change.
“Without question, NAR is at a crossroads,” RE/MAX President Amy Lessinger told Inman. “They’re the largest trade association in the United States that has been defending property rights and supporting real estate professionals. And I think that’s still an important part of the value they provide. But in recent years they’ve faced… I think the intense scrutiny we’re facing now highlights the need for meaningful evolution.”
Its evolution is still not in focus. That means, like so much else in the real estate industry, NAR will end 2024 on a cliff.
catch up:
Email Jim Dalrymple II
